Source: EURLEX
Language: en
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# 52011SC0867

**COMMISSION STAFF WORKING PAPER The added value of the EU budget /\* SEC/2011/0867 final \*/**

  

1.
Introduction

Belonging to the EU is of inestimable value to
the Member States of the Union and their citizens. This unique construction has
brought peace and stability and helped to reunite a continent divided by the
second World War. Over fifty years of working together Europeans have created a
Single Market, a common currency and an area of internal mobility unhindered by
border controls. Belonging to the EU helps Member States solve problems that go
beyond national borders, whether in the area of climate change or dealing with
illegal migration. Working together in a European regulatory framework EU
members can exploit the economies of scale of an internal market of 500 million
people and ensure fair play between all Member States, big and small, old and
new, rich and poor.

Much of what the EU does for its members is
done through political processes of coming together to share ideas and good
practices, through legislation and through international agreements and
programmes. Most of the EU's policies are implemented by its Member States,
using their own budgets and civil servants to bring commonly agreed policies to
life on the ground in their territories. However, there are some things that
can only be done by having an EU budget – to finance the actions that Member
States cannot fund on their own or which they can fund more economically by
pooling their resources through the EU budget.

The EU budget is small (1.01% of EU gross
national income[1])
because it does not need to mirror national budgets. The EU budget does not
fund direct health care for citizens, it does not pay for the running of schools
or the work of the police as national budgets do. It is an investment budget – 94.3%
is spent in the Member States. It is an expression of the added value of funding
some actions through the EU.

This Commission staff working paper accompanies
the Commission's proposals for the next Multiannual Financial Framework (MFF). It
explains the added value of having an EU budget and presents many examples of
how this works in practice in our Member States. This staff working document is
not about the overall value of EU membership – that cannot be reduced to a
simple calculation of financial benefit and many of the benefits of the EU
cannot be quantified or are so huge as to make quantification meaningless. This
staff working document has a very modest purpose: it is presented as part of a
budget proposal and it focuses on the added value of that budget for Member
States and EU citizens.

1.1.
What is EU added value?

On a general level, European added value is the
value resulting from an EU intervention which is additional to the value that
would have been otherwise created by Member State action alone.

Even under a budgetary angle, the concept of
European added value has been used in many different contexts, such as
in academic reflections on the EU budget, for defining goals and/or criteria
for project selection in specific EU programmes, in provisions of the Financial
Regulations and in evaluation of existing programmes. Most recently the Commission's
Communication on the EU Budget Review[2]
contained a section on EU added value (see section 1.2).

The sources and nature of this additional value
vary from intervention to intervention. It is, in particular, useful to
distinguish the European added value of an EU policy measure in general (like
an EU regulation to foster the single market) and that of an EU spending
programme per se. In both cases, European added value may be the results of
different factors: coordination gains, legal certainty, greater
effectiveness, complementarities etc. In both cases, measurement is a
challenge although in the case of EU expenditures, it should usually be easier
to monetise European added value compared to those cases where value may be
added due to more intangible contributions to the attainment of common European
objectives.

In all cases, however, the final judgement on
whether expected added value would justify an EU programme is ultimately the
result of a political process. This point has been stressed on several
occasions by the European Institutions.

In a letter of 26 November 2010 to the
President of the European Parliament and the President in office of the Council,
the Commission indicated that it considers that

"European added value is a key test to
justify spending at EU level even if the added value of a political project
cannot be reduced to a balance sheet".

The same perspective was already voiced by the
two arms of the budgetary authority during the negotiations accompanying the
adoption of the current financial perspective 2007-2013.

The European Parliament expressed its
concern about a strictly economic interpretation of the European added value:[3]

"the concept of European added value
must not be limited to advanced cooperation between Members States but should
also contain a visionary' aspect".

Similarly, while recognising the importance of
the concept, the Council also introduced an important caveat:

"whereas examination of the European
added value of proposed expenditure is accepted as an essential part of the
evaluation exercise, it was pointed out that this concept could not be based on
entirely objective criteria; it is also generally recognised that the concept
of added value should serve not to call into question Union policies which are
based on fundamental agreed principles laid down in the Treaty but simply to
evaluate the best means of achieving a given objective"[4].

Hence, while the assessment of the European
added value is ultimately always the result of a political process, what has changed
over time is the nature and the extent of the information available to support
this process. The following section looks at the way this process is being
managed in the Commission with a particular focus on spending programmes.

1.2.
European added value and the Budgetary Process

In its October 2010 Communication on the budget
review, the Commission stressed the fact that the EU budget should be grounded
in a series of core principles through which, European citizens should be able
to have a better view of what the EU budget is for, and how the key choices
have been made.

Whilst the added value of a political project
cannot be reduced to a balance sheet, it is nevertheless a key test to justify
spending at the EU level: whether spending at EU level means a better deal for
citizens than spending at national level. The European dimension can maximise
the efficiency of Member States' finances and help to reduce total expenditure,
by pooling common services and resources to benefit from economies of scale. As
a consequence, the EU budget should be used to finance EU public goods, actions
that Member States and regions cannot finance themselves, or where it can
secure better results.

The Commission has already tested the added value
of proposed expenditure in all policy areas when making its proposals for the
EU budget for the period 2007-2013.

To perform this test, the Commission used the
following criteria:

· 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[5].

At that time it was already clear that Union’s
common objectives could only be met through a partnership between the national and
European levels. National public spending obviously brings huge benefits to
citizens, increasing the vitality and durability of national economies through
public services, education and infrastructure; offering internal and external
security; and responding to society’s needs across a wide range of policies.
But there were limits to the effectiveness of national action. There are gaps
which only the EU could fill.

EU action can also be justified on value for
money grounds. In many cases, as illustrated in this paper, one euro spent at
EU level can deliver more than one euro at national level. Uncoordinated
spending at national level cannot reach common objectives. In many cases,
pooling resources and expertise is an efficient way to make savings, and at the
same time to reach the critical mass required to deliver certain key
objectives.

The EU budget should focus on EU added value,
meaning the delivery of objectives that can be achieved better through spending
at EU level rather than at the level of the individual Member States. The
design of both the multiannual financial framework and the sectoral instruments
and programmes should be such that the contribution of the expenditure at EU
level is made obvious.

EU added value should be prominent in areas of
spending linked to the EU core competences (for example, agriculture, where
more than 70% of total spending is at the EU level), or closing missing links
(for example, key cross border infrastructures in energy, transport and ICT) or
because the issues at stake are of such a magnitude that individual actions by
the Member States would not reach the objectives (for example, large-scale
research infrastructures or the combatting the consequences of climate change).

Pooling resources at EU level should also
generate economies of scale and better results than the same amounts separately
spent at national levels (for example, in the areas of research or eduction
mobility).

2.
european added value in the context of the European
Economic Recovery Plan

The Commission launched the European Economic
Recovery Plan (EERP) in November 2008. The objective of the EERP was to drive a
coordinated EU response to the economic crisis. The EERP combined coordinated
national action with EU policy measures specifically applied in 2009 and 2010
in a mutually reinforcing way and it was based on two mutually reinforcing main
elements: firstly, short-term measures to boost demand, to save jobs and help
restore confidence; secondly, "smart investment" to yield higher
growth and sustainable prosperity in the longer-term.

The Commission co-ordinated and monitored the
implementation of the EERP while Member States followed a differentiated approach,
as they needed different kinds of fiscal stimulus depending on their economic situation.
The EERP included timely, temporary and targeted actions to help households and
industry, to support employment and stimulate growth. It put forward concrete
steps to promote e.g. entrepreneurship and research and innovation. The EERP
aimed to boost efforts to tackle climate change while creating much-needed jobs
at the same time, through for example strategic investment in energy efficient
buildings and technologies.

In figures, the EERP included a fiscal stimulus
of around 1.5% of EU GDP or € 200 billion, within both national budgets (around
€170 billion, 1.2% of GDP) and EU and European Investment Bank budgets (around
€30 billion, 0.3% of GDP). As part of the EU's contribution to this stimulus,
the EERP proposed accelerating payments of up to €6.3 billion under the
structural and social funds. The EERP also supported projects in the field of
energy and broadband internet in rural areas as well as activities related to
'new challenges' identified in the Common Agricultural Policy's Health Check.

The share of the EU budget devoted to the EERP amounted
to €5 billion. In addition to the EU budget actions, the European Investment
Bank increased its yearly interventions in the EU by some €15 billion in 2009
with a similar figure in 2010.

East West electricity interconnector
(Ireland / UK)

Under the EERP the Commission proposed grant
funding of €110 million for the East West electricity interconnector between
Ireland and the UK. The funding provided from the EU budget enabled the company
to get a €300 m loan from the EIB and to get attractive loan terms from the
banking sector for the remainder of the financing (€200 million). This is an
excellent example of the added value of the EU budget because:

·
The EU funding gave the project the EU seal of
approval and underscored the political significance of the project as part of
connecting the EU's energy islands. This political and financial backing
enabled the operator to attract the remaining loan finance needed to ensure
that the project goes ahead.

·
Ireland has the capacity to generate
considerable amounts of electricity from renewable wind energy. The surplus can
be exported to the UK via the interconnector but the project would not have
happened without the stimulus of EU funding. This will be the first ever
electricity interconnector between Ireland and mainland UK.

·
The project is on target for completion in 2012,
helping to link Ireland to the wider EU electricity grid well ahead of the EU's
2014 target for connecting all energy islands together.

Estlink-2 electricity interconnection
between Finland and Estonia

Under the EEPR, the Commission granted funding of
€100 million in March 2010 to support the construction of the Estlink-2
electricity cable with a capacity of 650 megawatts between Estonia and Finland, which should become operational by
2014.

The Estlink-2 connection is the largest ever
investment in the Estonian electricity network, with a total estimated cost of
€320 million. The project is being built jointly by the Estonian electricity
transmission system operator, and its Finnish counterpart. Following the
Commission's decision and thanks to its endorsement as an EU priority project,
the Estonian company and the European Investment Bank agreed reached an
agreement in November 2010 on a €75 million loan to provide further
part-financing of the project. In the same month, the operators signed an
agreement on the construction of EstLink-2.

Without EU financial support, the project would
not have been implemented by 2017-2020. Furthermore, the EIB loan for the
project would have been much lower.

The project will contribute
significantly to the further integration of the Baltic and Nordic energy
markets by tripling transmission capacity between the two countries. It will
also contribute to the wider objectives of EU energy policy, for example
through the increased security of supply in the Baltic region and reduced
congestion on transmission between Estonia and Finland. Estlink-2 will give
market participants the opportunity to act on a larger regional market and will
improve the interconnection capacity between the Baltic States with the rest of
the EU, increasing the security of supply of countries which are still considered
as an energy island.

The EERP also played an important role in supporting
the development of state of the art technologies.

Offshore wind energy projects

The EERP funded six offshore wind projects which are
forerunners in the offshore wind sector. The technologies that will be
demonstrated and deployed on a large-scale – innovative foundation structures
(gravity, jackets, tripods, tri-piles), multi-MW offshore turbines, modular
based grid integration technology – are indispensable in order to achieve the
ambitious EU goals of offshore wind penetration in 2020 and beyond. The EEPR
grants will secure the installation of the first large size (400 MW) offshore
wind farms and are expected to result directly in additional carbon-free
electricity production capacity of about 1500 MW. They play a crucial role in
helping EU Member States achieve the binding targets for renewable electricity
in 2020. The grants will pave the way for the first steps towards a European
offshore grid, enhancing the flow of electricity in the internal energy market.
On average the EU grants for Offshore Wind Energy projects (€565 million) have
a leveraging ratio of 1 to 6 (total investment cost estimated at €3.5 billion).

3.
European added value in the area of research
3.1.
The notion of EU added value in research

In the economic literature, there is strong
support for the idea that European collaborative programmes contribute to reducing
the uncertainties, the risks and the costs deriving from undertaking advanced
technological projects. It is accepted that the creation of the Framework
Programmes accelerated the international dimension of collaborative research[6] in the EU. The multi-annual
Framework Programmes (FPs) have become the medium-term planning instrument for
Research and Technological Development (RTD) across the EU based on the
rationale that international research programmes are deemed to ‘add value’
which cannot be obtained through national programmes[7].

"EU funded research is found
to have high added value by encouraging researchers to cooperate across
national boundaries and to share complementary skills and knowledge, to promotes
competition in research, leading to higher quality and excellence and to make
possible projects that, because of their complexity and scale, go beyond what
is possible at national level."[8]

Research on the scale of the EU can offer
better value for money than nationally-funded research, and has a powerful
leverage effect on private funding, stimulating large technological initiatives
and the development of European poles of excellence in highly competitive fields
such as information and communication technology, biotechnology and
aeronautics. As the complexity of research and the capital investments required
increases, no Member State acting in isolation can create the minimal, critical
mass. The economies of scale offered at EU level become a necessity and the
benefits of linking specialists across borders helps to ensure robust and
complementary approaches to innovation.

3.2.
The economic impact of EU research

EU research generates high European added
value, which in turn produces excellent value for money for the European
taxpayer. Different studies and external evaluations show that EU funding
produces the following economic impacts:

–
€1 of Framework Programme (FP) funding leads to
an increase in industry added value of between €7 and €14.

–
Member States evaluations demonstrate the high
impact of the FP: e.g. the EU Framework Programme's annual contribution to UK
industrial output exceeds € 3.4 billion (£3 billion).

–
The long-term macro-economic impact of the
Seventh Framework Programme amounts to 900,000 jobs, of which 300,000 in the
field of research; an extra 0.96 percent of GDP; an extra 1.57 percent of
exports; and a reduction by 0.88 percent of imports.

–
EU funded collaborative research reduces risk
and enables the achievement of pan-European standards. Standards and
technologies developed by EU-funded researchers are found today in over 600
million 3G mobile phones, generating more than € 250 billion of revenues every
year to EU companies in products and services.

–
EU funded collaborative research facilitates the
growth of innovative SMEs. In 2006, two small research-based companies from
Sweden and Belgium, BioInvent and Thrombogenics and their academic and clinical
partners received a €1.9 million grant to develop an innovative form of
treatment for cancer. In 2009, the companies secured a €50 million investment
from global pharmaceutical giant Roche, with the possibility of increasing this
amount to € 450 million in the future.

–
EU funding leverages private investment. In the
case of the EU's RSFF (Risk Sharing Finance Facility), the volume of loans is
12 times the EU contribution, and the additional leveraged investment in
research, development and innovation is 30 times the EU contribution.

–
As a result of targeted research from the
Commission's Joint Research Center costing about € 1 million, the cost of tests
for BSE were reduced and the direct EC subsidy per test could be scaled back from
€20 to €7 resulting in cumulative savings for the Community budget of about
€250 million over the period 2002-2006.

3.3.
Different aspects of EU added value

European added value of EU research activities
can take different forms:

3.3.1.
Critical mass

The critical mass made possible by actions at
EU level promotes cooperation amongst different types of organisations such as
universities, research centres, small and medium enterprises (SMEs), large
companies, foundations, etc. With its increased focus on translating basic
discoveries into prototype applications, European research has successfully
promoted cooperation amongst scientific disciplines, bringing together
researchers, engineers, clinicians and industrialists.

The NANOCMOS project

European engineers receiving EU collaborative
research support were able to develop the first chip in the world to go below
the 45 nanometer limit in 2004. The momentum generated by this project and
subsequent ones has put EU industry in pole position in this field opening the
door to a wide range of innovations in products and services ranging from
communications to embedded electronics where Europe has a world leading share
(40% of total market worth more than € 100 billion per year).

3.3.2.
Bringing barriers down

Another effect of European collaborative
research has been the overcoming of barriers between countries, by means of
multinational consortia as well as coordination of national funding programmes.

Fight against alpha-mannosidosis

There are at least 6000 to 7000 rare diseases,
which taken together affect some 43 million European citizens. Research at
national level is often hampered by a thin distribution of patients, few
specialised research groups, and a lack of standardisation of available data
and material collections.

Alpha-mannosidosis is a dangerous
genetically inherited disease caused by an enzyme deficiency, affecting 500,000
people in the EU for which no treatment is currently available. Only through EU
funded collaborative research can the necessary critical mass of patients,
expertise, and facilities be brought together. In terms of treatment, EU
funding promotes the development of so called "Orphan drugs" because
market incentives alone are insufficient to promote their development.

Since 2001, the EU has invested close to € 10
million through three consecutive research projects (FP5-FP6-FP7) to study this
disease with the ultimate goal of making a therapy available for all
alpha-mannosidosis patients. As a result, the biotechnologically derived human
enzyme product rhLAMAN (LamazymTM), has officially been designated in both
Europe and the US as a potential "orphan drug" to treat
alpha-mannosidosis.

The REDICT and AMI4EUROPE projects

REDICT is a project coordinated by the City of
Amsterdam, bringing together 6 regions and 17 partners which share a strong
R&D experience in the field of ICT and new media. The project has mapped
and analysed the critical issues of the sector, providing a survey of
mechanisms with which the different regions stimulate innovation, in particular
for SMEs. A Joint Action Plan was set up among the regions, implementing new
business support measures packages. It has stimulated a sustainable partnership
between European metropolitan areas in this field.

AMI4EUROPE is a project involvings 22 partner
institutions from 6 different countries coordinated by Asociación Madrid
Network (Spain). It coordinates and integrates Research-Driven Clusters in the
field of health in order to meet the opportunities that Advanced Medical
Imaging brings to the European society. Integrating and using
cross-disciplinary NanoMedicine, Pharmacological breakthroughs, Biotechnologies
for healthcare and ICT combined with standard Medical Imaging, significant
improvements of diagnostics and treatment for various diseases will be
possible.

Joint Programming Initiatives (JPIs)

A first pilot initiative to advance research in
neurodegenerative diseases, in particular Alzheimer’s, was launched in 2009
with, to date, 23 countries participating. In 2010, several other
health-related JPIs were developed, on Healthy Diet for a Healthy Life, Healthy
Ageing, and Anti-Microbial Resistance. The Commission assisted in their
identification and preparation and supports their implementation. Better
coordination of the research efforts in the EU will lead to more efficiency for
Europe in tackling societal challenges related to these issues.

3.3.3.
Dialogue between researchers and industry

With the Seventh Framework Programme
European research addresses broad societal issues such as the Innovative
Medicine Initiative, which helps the EU health industry to accelerate the
development of new drugs and treatments. Such transnational and cross-sectorial
partnerships between the public and private sectors make it possible for the EU
and the industry to implement a common agenda and speak with one voice,
preventing fragmentation and duplication of efforts.

Safety technology for planes, cars and
trains

Groundbreaking safety technology in airplanes and
cars has been developed by EU researchers. The Airbus A380, for instance, has
already flown more than 5 million passengers across the world using EU-funded
ICT technology that has developed a new control system for cabin pressure.

This is one of the successes of more than twenty
years of EU-funded research which has led to the development and
commercialisation of Time Triggered Architecture (TTA). This is an innovative
technology applied to the design of safety-critical systems that activate and
control safety solutions such as railway signalling, real-time adjustment of
speed and route in trains and aircraft, or keep the pressure in the cabin of
airplanes constant.

These systems need to guarantee their functioning
with extreme precision and speed even in the presence of faulty software or
damaged hardware components. In that sense, it can be said that TTA has
revolutionised safety technology.

Time-Triggered Architecture has the potential to
become the world-wide standard for many embedded computer applications. Safety
systems for embedded computer control systems in aeroplanes, cars and trains
are the first applications of this technology. Prototypes for renewable energy
generation and medical systems have been built successfully. Other applications
are anticipated for industrial control and automation.

3.3.4.
Worldwide excellence

Alongside cooperation, EU funding also helps to
promote more intense competition in research leading to higher quality and
excellence. The European Research Council (ERC)[9]
is a good example in that regard.

ERC - the European Research Council

Under the Seventh Framework Programme, the
European Commission created the European Research Council, and established an
Executive Agency to manage Europe's first large-scale competition for funding
frontier research open to individual researchers. The long-term funding
provided by the ERC schemes provides the conditions under which researchers can
carry out high risk/high gain projects in areas of their own choosing at the
frontiers of knowledge. By the end of 2013 more than 4,000 Principal
Investigators will have received grant support.

The ERC's international peer review process has
become a "gold standard", and several countries have introduced
reforms to their own national systems based on the ERC model and even provide
funding to their national runners-up in the ERC calls for proposals. The
prestige of hosting ERC Principal Investigators is also leading to intensified
competition between Europe's universities and other research organisations to
offer the most attractive conditions to top researchers. In this way the ERC
provides a powerful dynamic for driving up the quality of the overall European
research system and raising its status, visibility and attractiveness, well
beyond the individual researchers it funds.

There is evidence that the ERC is already helping
to retain in the EU and attract to the EU leading European researchers who
might otherwise have pursued their careers in the US in certain fields. For
example, two-thirds of the ERC's grantees in neurosciences have had post-doctoral
experience in the US; and, half of the ERC's grantees in economics completed
their PhD in the US. In 2010, a young ERC grant-holder, Professor Novoselov,
received the Nobel Prize for Physics for his work on graphene.

3.3.5.
Powerful infrastructures

Research infrastructures are another case for
which co-ordination and pooling resources across Member States - and sharing
access – is paramount.

GEANT

GEANT is the pan-European data network dedicated
to the research and education community. Together with Europe's national
research networks, GÉANT operates 50.000 kilometres of optical fibre and
connects 40 million users in over 8,000 institutions across 40 countries.
Current distributed computing infrastructures enable over 13.000 researchers,
representing over 200 different scientific user communities (Virtual
Organisations), to have shared access to unprecedented computing and data
resources and to build collaborations across disciplines and geographical
boundaries.

3.3.6.
Leverage funding

European added value is also generated through
reducing research risk as well as leveraging private investment, and the Risk
Sharing Finance Facility (RSFF) is a particularly compelling case.

RSFF - Risk-Sharing Finance Facility

The project, launched in mid-2007, was
co-developed by the European Commission and the European Investment Bank (EIB).
The EU supports the EIB in its activities by providing partial risk coverage
from the Seventh Frameowk Programme for loans which meet the programme's
strategic objectives. The RSFF portfolio over the period 2007-2009 covered 137
projects: 46 signed operations, 16 approved operations awaiting signature and
75 other projects under appraisal/cancelled. The 62 signed and/or approved
projects make up a total of € 6.3 bn in 20 countries (18 EU Member States and 2
Associated Countries).

An example of such support is the project
Alphasat, a joint undertaking between Inmarsat PLC, a private company, and the
European Space Agency (ESA): this will be the first satellite to use a new
European high-power telecommunications platform. It will accommodate four
technological demonstration payloads (TDPs) developed by several European
universities, industry and space organisations. This research infrastructure
will support a new generation of mobile technologies and enable robust
communications across Europe, Asia, Africa and the Middle East.

As of 2010 its leverage effect in terms of
comparison between EU investment and total investment by beneficiaries reached
a ratio of 1 to 30 (€0.5 million vs. €15 billion leveraged).

4.
European added value in cohesion policy
4.1.
Overall effects of cohesion policy

Cohesion policy has both redistributive and
allocative effects:

–
It transfers resources to the poorest regions
(81.5% of total means available for cohesion policy are allocated to
convergence regions)[10].

–
It supports new actions in favour of growth,
jobs and sustainable development across Europe, both inside and outside the
convergence regions[11]. There is therefore a clear contribution to EU priorities.

–
It produces spillover effects from convergence
regions to the rest of Europe, via increased trade flows.

–
It induces – through its delivery system –
institutional and administrative change, promoting long-term planning,
mobilising a wide range of partners, diffusing a culture of evaluation and
monitoring of public policies, and reinforcing control and audit capacities.

Analysis of the performance of cohesion policy
in 2007-2013 shows that the policy has an even stronger added value in many
Member States in the current economic crisis[12]. The
policy provides resources to maintain public investment in the context of
pressures on domestic budgets.

In some cases (e.g. Poland), cohesion policy
has helped to protect against economic upheaval through maintaining domestic
demand and high levels of investment, while in Latvia and Bulgaria the policy
represents the only anti-cyclical measure in place. France has used EU cohesion
funding to accelerate implementation in such areas as sustainable development,
digital infrastructure and energy efficiency for housing.

Cohesion policy is also instrumental in the
establishment of a dialogue among the partners (EU/Member tate/region/local) on
development strategies and their implementation, which otherwise would most
likely not take place.

As outlined in the report from Professor Monti
on the single market[13], all EU regions will continue to experience a mix of opportunities
and adjustment needs with the expansion of the single market. Cohesion policy
has stimulated trade flows, upgraded infrastructure and enhanced mobility of
goods and services, has influenced the choice of location for economic
activities, and has ensured that environmental standards enjoyed by European
citizens are applied, contributing thus to reduce the development gaps between
economies.

Trade between the EU12 countries and the rest
of the Union has experienced a dynamic development over the course of the last
decade. Part of this growth reflects the gains which other countries have drawn
from the structural support allocated to poorer regions.

According to the macro economic model designed
to estimate the combined effect of levying taxes to raise the necessary revenue
as well as of the expenditure[14], the Structural and Cohesion Funds are estimated to have increased
economic growth across the EU27 as a whole. The GDP of EU27 is predicted to
increase by about 0.2% at the end of the current programming period.

Cohesion spending benefits several Member
States

In 2009, Poland, the biggest recipient of
cohesion policy funding in the current programming period, undertook a study[15] of the benefits for EU15 countries as a result of cohesion policy
in Poland. Based on a survey of contracts won by enterprises from the EU15
countries, the study shows that around 8% of the total contract volume in
Poland went to EU15 companies, enterprises from Germany being the by far most
important group. These companies were typically successful in larger Polish
projects.

4.2.
Contributing to growth in convergence regions

The results of two macro economic models (Hermin
and Quest)[16] find that the Structural and Cohesion Funds have had a
substantial effect on economic growth in convergence regions. This is the
case in Greece, Portugal, Spain and, to a lesser extent, Ireland, as well as in
Southern Italy and Eastern Germany and in all of the EU10 countries.

–
In the EU10 countries taken together, the models
estimate that GDP in 2009 was almost 5% higher than it would have been without
Structural and Cohesion Fund support, despite the short 2004-2006 programming
period in these Member States.

–
A recent academic study of the dynamics of
regional GDP growth in the EU15 between 1995 and 2006[17] found
a sharp discontinuity between those regions in receipt of Objective 1 funding
at the beginning of the period and the other regions. Comparing regions near
the eligibility cut-off, per capita GDP of Objective 1 regions grew an average
of 0.8-0.9 percentage points more than similar regions on the other side of the
cut-off. This implies an extra 10-12% on GDP over the two programming periods.

–
In Eastern Germany, an innovative study compared
enterprises assisted to similar non-assisted enterprises. An average grant of
€8,000 per employee generated around €11-12,000 of additional investment, demonstrating
the clear leverage effect[18].

Closing of the gap has been achieved also by
improving connections between the more less and more developed parts of the
Union via the upgrading of the motorway and railway systems, notably the transport
networks:

–
In 2007-13, cohesion policy is investing €75 billion
in improving transport systems in convergence regions.

–
In the 2000-2006 period, 60% of the existing and
new motorway network in the EU12 was co-financed by the funds, but needs remain
significant, as illustrated by the fact that the density of the network in the
EU10 was at just 34% of the EU25 average in 2006, up from 31% in 2000.

–
The rail network has been improved significantly
as a result of investments co-financed by cohesion policy. The funds
contributed to the construction and upgrade of 7,260 km of rail in 2000-2006.
For high speed rail, by 2006, 56% of all network increase was co-financed by
the funds, while in some cases, like Spain, all the total increase in network
was supported.

–
Reduced journey times have been important, for
example, between Rome and Naples (from 114 minutes to 65 minutes), as well as
between Madrid and Andalucia (Madrid-Malaga from 240 minutes to 160 minutes).

In short, cohesion policy has strengthened the
overall level of investment, growth and economic, social and territorial
convergence to an extent which would not have occurred without EU transfers.
This has had the effect of strengthening the long term growth potential of the
Union, since convergence regions are using the factors of production more
efficiently.

4.3.
Supporting smart, green and inclusive growth
across Europe
4.3.1.
Smart Growth

Some €80 billion is being invested in support
for enterprise and innovation in 2007-2013, the largest field of expenditure in
most regions. This includes direct financial aid to investment and R&D, but
also, increasingly, non-financial assistance, in the form of networking and
innovation systems, business advice and incubators, all of which have been
proved to increase the knowledge content of support. Evaluations for the
2000-2006 period recorded:

–
At least 1 million jobs estimated created in
supported projects[19].

–
An estimated 230,000 enterprises (mainly SMEs)
received direct financial support - mainly grants but also loans or venture
capital.

–
An estimated 1.7 million enterprises ( mainly
SMEs) received advice, expertise and support for networking

Lahti Clean-tech cluster (Finland)

The EU's intervention in
this project had a catalyst effect: it encouraged innovation and development of
environmental technologies by bringing together small and large enterprises,
educational organisations and regional authorities. The cluster provides
services which make it easier for its 200 participating businesses to network
and branch out into the international market.

The Lahti Science and Business Park which
coordinates the cluster has become the leading environmental technology centre
in Finland. Between 2005 and 2007, some 20 clean-tech companies and
organisations were relocated to the region. The EU budget contributed €1.5
million to this project. The business development and relocation services of
the park have attracted investment worth more than €30 million and some 170 new
jobs to the region.

Competence Centre for Cancer Research
(CCCR), Estonia

The aim of the CCCR, established in 2005, was to
establish a strong long-term private-public partnership in top-level cancer
research, based on the common vision of SME entrepreneurs and scientists. It supports, in particular, the access of
Estonian biotechnology SMEs to hospitals and global markets. New jobs have been
provided for top-level scientific staff - CCCR staff increased from 30 in 2005
to 71 in 2010.

The EU intervention helped develop new expertise
that was not previously available in Estonia: new start-ups in biotechnology
and in certain high-tech services needed for the CCCR projects with more
graduate students specialised in applied cancer research. CCCR now has a
funding agreement until 2015 and its activities are on a sustainable path. It
has been successful in several projects supported by other EU funding sources.
Moreover, the financial resources secured by the commercialisation of the
results are reinvested by the partners in new R&D projects.

The EU budget contributed €1.16 million to this
project.

Nanoscience and nanotechnology centre, Ljubljana (Slovenia)

Innovation pushes ahead in Slovenia as researchers
come together from the public and private sector to form a centre of excellence
in nano-science and nanotechnology (CE NS&NT). Six research institutes and
26 businesses came together for six major research projects. The projects are coordinated by the research institutes and the
businesses involved as potential end-users provide funding. In some cases, the
businesses also participate in the research.

The six projects cover: nanoelectronics and
equipment for nanotechnology; synthesis of nano-particles and nano-composites;
nano-materials in electrochemical systems; nano-structured surfaces and layers;
synthesis of 1D inorganic nanostructures and bio-nano-structures;
characterisation on nano-metric scale.

The ability to share the
modern testing equipment has increased the motivation of industry partners, who
previously viewed cooperation as a burden rather than a benefit. The project is
also raising the skills among industry researchers and providing grounds for
participation in research for postgraduate students and young researchers.

The contribution from the European Regional
Development Fund (ERDF) to this project was €829.000.

4.3.2.
Green Growth

Even before combating climate change was
embraced as a central objective of the EU, cohesion policy started to put in
place measures to improve energy efficiency of enterprises (example: Czech
Republic) or set up renewable energy production facilities (example: the
Azores, Portugal). Future interventions to tackle climate change can benefit
from the experience accumulated during the implementation of these investments,
even if they do not receive financial assistance from cohesion policy.

–
Half of the Member States have included
indicators for the reduction of greenhouse gas emissions in their cohesion
policy programmes for the 2007-2013 period. Austria, Germany, France and Italy
have reported a reduction of over 27,000 kilotonne equivalents.

–
Close to 20 million people now have access to
improved water supply as a result of cohesion policy assistance in 2000-2006.
Out of the estimated 40 million people whose wastewater has begun to receive
appropriate treatment in this period, 23.5 million people are connected to
investments financed by cohesion policy. There are numerous examples not only
for improved water infrastructure like the drinking water and sewage in the
Torysa river basin in Eastern Slovakia or the Dublin wastewater treatment
plant, but also establishing specialised systems for animal waste in Hungary or
closing hundreds of illegal waste disposal sites all over Europe.

New approach to renewables in Güssing
(Austria)

Güssing (a small town in the
southeast of Austria)
is a model for the forward-looking renewable energy
policy at local level that is driving the economic development of the whole
region. Using wood from local forests in its biomass heating plant, the town
produces more electricity than it consumes and is able to provide power for the
entire region. Over 50 companies have been created in the renewable energy
sector alone and since 1995 Güssing has reduced its carbon dioxide emissions by
100%.

The availability of cheap heat (30% cheaper) has
led to over 1 000 new jobs being created in and around the
town, including 100 in a new office building on an industrial estate which
houses the European Centre for Renewable Energy. In
order to facilitate the dissemination of experience in the field of renewable
energy sources, a network including regional, national, and international
partners has been founded.

The EU budget contributed €461.000 to this
project.

4.3.3.
Inclusive growth

The European Social Fund (ESF) supports the
development of human resources and facilitates a better response to local
labour market needs and, together with the ERDF, employment possibilities.

–
One third of the unemployed in the EU
participated in ESF supported programmes each year.

–
The ESF supports gender equality, by helping
women into employment, promoting their lifelong learning, supporting their
participation in science and technology as well as assisting them to start up
businesses. In 2000-2006, €4.5 billion ESF, went on measures to promote gender
equality and gender mainstreaming. The largest expenditure on gender-related
measures was in Germany, accounting for 25% of the total across the EU.

4.4.
Cooperation across the EU

Cohesion policy promotes exchanges and joint
programmes between countries and regions. Cohesion policy fosters territorial
cooperation in its three dimensions (cross-border, transnational, and
interregional). Addressing common problems together allows for a more efficient
use of public resources and circulation of ideas and good practices.

The added value of European territorial
cooperation lies in the fact that if offers possibilities for joint action
which are needed to address challenges that increasingly cut across
national/regional boundaries. Territorial cooperation can also provide
important contributions to achieving the Europe 2020 strategy by addressing
challenges that increasingly cut across national boundaries. In addition,
co-operation programmes play an important role in bringing Europe closer to the
citizen, given that they allows for regional and local actors across Europe to
engage in joint projects and thus in a "European experience".

FLAPP - turning back the tide in
flood-threatened regions

Strength in numbers and multiple disciplines reflect
the approach taken in the FLAPP project where the combined efforts of 15
countries resulted in practical ways to deal with flood danger. FLAPP (FLood Awareness & Prevention Policy in border areas)
enabled partnerships to be formed that otherwise would not have taken place.
FLAPP introduced measures including flood forecasting and river basin
management to protect people, nature and economic development in at-risk border
areas.

Residents in the areas covered by FLAPP are no
strangers to flooding, hence the positive input from 37 partners who brought their water management experience from 12 river basin
areas. From Ireland to Greece, and from Estonia to Spain, experiences are being
shared and put to practical use.

The EU budget contributed €1.1 million to this
project.

Ships set sail for greener cargo
transportation

Shifting cargo from road to sea to reduce energy
consumption, carbon emissions and pollution is at the heart of the Northern
Maritime Corridor (NMC) project. This transnational project which covers 20
regions in 9 countries (including Russia) bordering the North Sea and Europe’s
northern periphery has led to improved short sea
shipping services and greater accessibility to the regions concerned. In terms
of innovation, the NMC project developed models and concrete ICT tools for the
intermodal transport industry. In particular NMC brought in the use of
radio-frequency identification for tracking cargo.

The innovative character of the project was also
pursued in other ways. Many regions set up maritime
clusters with as many as 10-20 partners. The NMC project had an important
impact on the expansion of maritime services in the North Sea regions. The most
significant achievement was the European Commission’s approval to extend the
motorways of the sea layout towards the Barents region.

The EU budget contributed € 2.6
million to this project.

Regional Early Warning
System (EWS) on water scarcity in the Alps

'Alp-Water-Scarce' (Water Management Strategies
against Water Scarcity in the Alps) is a three year project funded by the
"Alpine Space programme" under the European Territorial Cooperation
2007-2013. The project started in October 2008, involves 17 partners from five
countries in the Alps and is coordinated by the Mountain Institute, University
of Savoy, France. It deals with developing water management strategies and
especially the deployment of an early warning system (based on mobile phone
supported hydro-climatological monitoring, hydrological models and GIS) to
predict water scarcity at the seasonal and multiannual level in the Eastern
Alps (Regions of Veneto and Styria). Several universities, federal research
institutes, regional provinces, local governments, regional agencies, alpine
economical societies, geological surveys as well as chambers of agriculture and
forestry participate in the project.

Øresund Science Region: Cross-Border Triple
Helix Collaboration (Sweden/Denmark)

The Øresund Science Region (ÖSR) is a
cross-border initiative that brings together regional authorities, businesses
and universities. This ‘triple-helix’ model is a focused approach to
cooperation between universities and the surrounding society. The ÖSR uses and
develops the Region’s unique strengths: a highly educated population and
market-leading technology, 12 universities, 6 science parks, 2000 companies and
some 12,000 researchers. These strengths are reflected by the region’s large
number of researchers and high-technology companies. A €1.9 million investment
from the ERDF was matched with a similar amount of Swedish and Danish
co-financing, both public and private.

ÖSR is a regional development project with
innovation and research platforms and projects as tools to create linkages
between authorities, industry and universities across the Swedish-Danish
border, in identified core competencies: Medicon Valley Academy (health / pharma);
Øresund IT Academy; Øresund Environment Academy; Øresund Food Network; Øresund
Logistics; Diginet Øresund (digital entertainment); Nano Øresund.

The existence of cross-border support from the EU
was one of the main catalysts for taking the project forward – without EU
support the challenge of accessing different national funding would have been
too complex. The project also demonstrates how the EU can encourage and assist
developed border regions in increasingly sophisticated co-operation, in fields
directly linked to the Europe 2020 Strategy. It has galvanised the public,
private and education sectors to work together for the common good of the wider
region, through this individual project, and by placing this project at the
heart of a longer, multi-annual programme approach.

4.5.
Social Cohesion

Investing in people is not only a core EU
policy but also makes economic sense. According to OECD data, the average private and public rate of return on education and
training is between 8% and 11.5%, well above most other public investments.

Financial support at EU level through the
European Social Fund spurs national reforms towards common employment
objectives.

Job-brokering service in Hungary

In Hungary, the European Social Fund has helped
the employment services to enhance short-term matching between the needs of the
labour market and the skills available. The new job-brokering system provides
better knowledge of instant and short-term variations on the local labour
market. A number of measures have been introduced, including the provision of regional
and local labour market information to employers and employees and the
development of an internet based-system that helps employers give quick,
practise oriented feedback to the PES about the labour market demand’. This service
provides quicker answers to stakeholders, leading to better adapted training
for unemployed people and other jobseekers, considerably increasing their
prospects on the labour market.

EU spending in employment, education and social
inclusion has helped its capacity to leverage additional public and private
funding, which would otherwise not have been channelled to these areas. By
concentrating on the modernisation of labour market and education institutions
in a systematic way, EU programmes allow every euro spent to support on the
employability of a higher number of people.

·
Over the period 2000-2008[20], the ESF supported
approximately 76 million people and 1.7 million organisations. ESF participants
have been recruited into one in four of all new jobs created and the ESF was
directly responsible for half the progress made on the EU-level life-long
learning benchmarks.

·
Each year over the 2007-13 programming period,
projects funded by the ESF are estimated to help 1.7 million people into
employment (two-thirds of people supported by the ESF are unemployed or
inactive; 10% are long-term unemployed; more than half are women and about a
quarter are under 25.

Under the 2007-2013 programming period, young
people are supported in all Member States and in 91% of the ESF Operational
Programmes, accounting for 68% of the budget. Between 2007 and 2009, 5.8
million young people have benefitted from the ESF through training or
mentoring.

ESF support in West Wales

In rural West Wales (UK), the ESF supported a €
4.5 million project to assist young people most at risk of dropping out of
school. Teachers and youth leaders co-operate to offer guidance and emotional
intelligence support to 11-13 year olds. The project has helped over 7 000
young people.

The benefits of building the human capital of future generations of workers are usually felt in
the long run and are often are difficult to estimate. The stability of the EU
programming periods offers all actors a stable environment to undertake
the necessary long-term strategic planning required in employment policy, often
compensating for the fact that domestic funding tends to be more vulnerable to
short-term shifts.

Social Integration of people through the
ESF (Spain)

In Spain's Castilla y León's region, the ESF
co-financed the "Access" programme to improve the social integration
of Roma people. In 2010, 208 women and 220 men were helped to find employment.
The programme works in several Roma communities in the region and targets those
who are furthest from the labour market. Participants receive tailored training
and job-search assistance.

5.
Added value through solidarity across the EU

Different EU policies are an expression of
solidarity across Europe, helping to remedy consequences of the economic crisis
or of natural or man-made disasters.

5.1.
Solidarity through cohesion policy

The MG Rover case (United Kingdom)

The package of support offered by the Better West
Midlands project in England delivers a bespoke service tailored to the needs of
both employers and individuals. It includes individual advice and support and
access to skills and training provision. This project builds on previous
successful programmes which were developed as a response to the closure of MG
Rover. Funding from the European Social Fund helped to provide an extended
range of support and training to workers under threat or notice of redundancy,
prior to their current employment ending. The aim is to maximise their
capability to move directly into new employment. The project will help about 14
500 people from companies across the West Midlands in manufacturing and other
sectors.

Cohesion policy can help develop prevention
measures, building synergies between different EU policies.

Flood management along the Tisza river,
Hungary

The Tisza river basin in eastern Hungary is a
flood-prone area that has had several major disasters in the past. Flood
reservoirs have been created on some of the original flood plains of the river
which were curtailed by dikes over the centuries. The ERDF and Cohesion Fund is
investing €290 million of a total of €400 million for the construction of six
reservoirs and the relocation of several dikes. These investments started in
2000-06 and will continue over 2007-13.

A fully integrated approach was developed,
involving the Ministries of Agriculture and Environment, the research and
scientific community as well as local authorities and the general public,
enhancing the governance approach.

The first reservoir was completed in 2008. In
addition to helping to adapt to climate change, natural flood reservoirs have
several co-benefits and are the typical win-win investments on ecosystem
services such as an efficient solution to significantly reduce flooding risks
(buffer role of nature); providing storage water for irrigation, thus offering
a solution to ease droughts; restoring space to river and nature thus
protecting biodiversity (creation of wetlands); addressing problem of
decreasing groundwater level (regular flooding of the reservoirs); offering new
potential for eco-friendly agriculture, nature tourism and leisure activities.

This is a good example of the added value of the
EU assistance as the use of EU funding resulted in an integrated and
cross-cutting approach, building synergies between cohesion policy and CAP. The
use of cohesion policy funding ensured a reinforced governance by involving
local communities, civil society and socio-economic partners. Finally, funding
from cohesion policy also benefits the neighbouring countries (mitigation of
flood risk).

5.2.
Solidarity through the EU civil protection
mechanism

The EU civil protection activity is focused on
adding value to Member States efforts by providing effective systems for
preventing and protecting against man or natural disasters. In supporting and
supplementing national policies in the field of civil protection the EU
contributes to make them more effective through the pooling of experience,
assets and mutual assistance which helps to reduce the loss of human life,
injuries, material damage and economic and environmental damage, When disaster
strikes within the EU or in third countries, the authorities of the affected
Member States can benefit from immediate and tangible assistance through the EU
Civil Protection Mechanism.

Response to floods in Poland

In May 2010 Poland experienced the worst flooding
in 250 years. Over 2,000 km2 were flooded, which corresponds to 0.8% of Poland's territory.
Participating States to the EU Civil Protection Mechanism had been pre-alerted
on 17 May. Two days later, Poland issued a formal request for assistance which
triggered a very generous response by several countries via the Mechanism. The
MIC coordinated teams and pumps sent by CZ, DE, DK, FR and NL and also
mobilized the EU co-financed High Capacity Pumping module of Estonia, Latvia, and
Lithuania in the framework of the Preparatory Action on an EU Rapid Response
Capability. A Liaison Officer was dispatched to Poland who followed the Balt
Flood Combat module and contributed to the preparation of flood forecast maps.
Overall, this joint effort greatly helped Poland to deal with the floods and
get back to normalcy as quickly as possible.

Combatting forest fires in Portugal

In July 2010, the Portuguese authorities requested
assistance through the European Civil Protection Mechanism following a critical
and aggravated forest fire situation which included 350 forest fires and all
national available means were in incessant use. Portugal requested heavy aerial
means for forest fire combat operations consisting of two water bomber planes.
The request immediately triggered several offers of assistance by Italy, Greece
and France. Spain had already assisted Portugal in fighting fires in the Viseu
and Braga region. The Italian, Greek and French offer consisted of two water
bomber planes each. Portugal accepted the Italian offer and these planes were
in action by the afternoon of the request and based at the Ovar airbase in the
North of Portugal.

5.3.
Solidarity through the European Globalisation
adjustment Fund

The European Globalisation adjustment Fund (EGF)
was established in 2006 [21] to
support workers made redundant as a result of major structural changes in world
trade patterns due to globalisation.

The EGF has a budget of up to €500 million, and
supports active labour market policy measures to help redundant workers find
new employment. The EGF intervenes in case of mass redundancies (more than 500
workers) or in small labour markets.

The EGF was revised in 2009[22] to extend its scope to support to workers made redundant as a
consequence of the global financial and economic crisis and to increase the EGF
co-funding rate from 50 to 65 %.

Between 1 January 2007 and 31 December 2010,
Member States submitted 71 applications for EGF support, covering more than 72
000 workers in some 6 000 enterprises, both large and small, operating in
various economic sectors. The total amount of EGF support requested amounted to
€337 million. Without it, support to workers would have been less extensive or
less efficient, particularly in (small) regions with high numbers of
redundancies. The EGF has also been useful in terms of
helping workers to upgrade their qualification level. Of all workers targeted
for assistance so far, 46.3 % had low levels of qualification, 42.3 % medium
levels of qualification and 11.4 % higher qualification levels.

EGF supports more than 3000 workers in
Germany

In June 2007 Germany applied for EGF support
following 3 303 job losses when the Taiwanese mobile phone manufacturer BenQ
withdrew all financial support from its two German based subsidiaries, causing
their insolvency. These subsidiaries were located in Munich, (Bavaria),
Kamp-Lintfort and Bocholt (North Rhine Westphalia). 2 528 of the dismissed
workers decided to enter into a transfer company to benefit from active labour
market policy measures. The EGF made it possible to
extend the period from 12 to 17 months and to increase the quality of the
support measures. Ultimately,
1 879 (or 74 %) of the EGF beneficiaries were reintegrated into the labour
market.

5.4.
Solidarity through the European Union Solidarity
Fund

The EU Solidarity Fund (EUSF) enables the EU to
give financial assistance to Member States and countries negotiating their
accession to the EU in the event of major natural disasters. The EUSF is
financed with appropriations over and above the normal EU budget, to be
approved by the European Parliament and the Council on a case by case basis.
The maximum annual amount that can be mobilised is €1 billion.

Since its creation in 2002, the EUSF has been
used to provide support for those suffering from 45 disasters covering a range
of different catastrophic events including floods, forest fires, earthquakes,
storms and drought. 23 different European countries have received more than €2.4
billion. Assistance from the EUSF may be used to supplement national public
expenditure for essential emergency operations such as the restoration of
essential infrastructures and securing protective infrastructures, for rescue
services, provisional housing, cleaning up and the protection of cultural
heritage.

Support from the EU Solidarity Fund for the
L'Aquila earthquake

In April 2009, an 5.8 magnitude earthquake
devastated the Italian region of Abruzzo claiming the lives of 300 people and
causing severe destruction of basic infrastructure, private homes, public
buildings, businesses and the region's impressive cultural heritage. With total
direct damages exceeding €10 billion the disaster qualified as a “major natural
disaster”. Following an Italian request for support,  the Commission proposed
granting assistance amounting to €493.8 million. The amount was approved
by the EP and the Council and subsequently used for first emergency operations,
two housing projects creating accommodation for over 20 000 people, and a
project for the creation of temporary schools. The L'Aquila earthquake was the
biggest disaster since the creation of the Solidarity Fund.

6.
European Added Value in the Common Agricultural
Policy
6.1.
The notion of EU added value in the CAP

The CAP is a fully common policy of the EU. It provides
European added value by supplying European citizens with
safe and high quality food in a competitive market, maintains the wide variety
of landscapes throughout Europe through sustainable land management and helps
rural areas to remain viable and attractive.

The CAP helps the EU to respond
effectively to transnational goals and cross-border challenges such as
mitigating climate change, enhancing biodiversity and contributing to economic
and social cohesion, the development of the Single Market and
the EU trade policy, through a common set of rules, principles and objectives;

The CAP also ensures a more efficient use of the
budgetary resources of the Member States vis-à-vis the coexistence of national
policies. In the absence of a single common policy, 27 different national policies
would be more costly and certainly less effective, inducing different levels of
intervention and trigger a major risk of distortion of competition;

6.2.
Synergies with other EU policies
6.2.1.
Ensuring a positive contribution to the
environment

Through its design and
implementation as a common policy the CAP helps EU farmers to respect environmental
legislation and requirements because its decoupled direct payments are subject
to compliance with environmental laws ( non-respect for these laws is followed
by a reduction in support payments to farmers) and through more targeted rural
development measures (like agri-environment schemes). By ensuring the
development of a sustainable agriculture across the EU territory and
encouraging farmers to adopt agricultural practices that preserve the
environment, safeguard the countryside and mitigate the impact of climate change,
these instruments have allowed considerable achievements in the field of
environment and climate change.

Climate change mitigation and provision of
environmental public goods

The introduction of decoupled direct income
support combined with the implementation of specific and targeted
agri-environmental measures have contributed significantly to climate change
mitigation across the EU through the reduction in the EU beef herd while
ensuring the provision of environmental public goods through the support to
environmentally-friendly agricultural practices.

Today, while agriculture and forests cover 47%
and 37% of the EU territory respectively, approximately one third of
agricultural land has high nature value where valuable habitats have developed
in interaction with farming practices. Policy indicators reflecting the path of
CAP reform show that agricultural and forestry areas under successful land
management would contribute over the 2007-2013 period 57 million hectares to
biodiversity, 38 million hectares to water quality, 26 million hectares to
climate change and 37 million hectares to soil quality. The protection of
permanent grassland which is important for carbon sequestration has allowed the
stabilisation of this type of land use in spite of the decline in beef
production triggered by the introduction of decoupling.

Further achievements have taken place such as the
substantial decline in the use of fertilizers since the late 1980s, estimated
to reach -28% for nitrogen, -67% for phosphorus and -61% for potassium by 2017 compared
to 1988 levels. In a similar way the reduction in greenhouse gas (GHG)
emissions from the agricultural sector have outperformed other economic sectors
and reached 20% between 1990 and 2005 for non-CO2 (more than twice the rate of
the EU commitment required by the Kyoto Protocol). The agricultural sector now
accounts for around 9% of total EU GHG emissions.

6.2.2.
Ensuring the well functioning of the EU market

A Community approach allows the application of
common rules in the single market and therefore provides fair conditions and a
level playing field for all the Member States. In this respect, the CAP, which
definition and implementation stems from the Treaty on the Functioning of the
European Union (see notably Article 38), has proved its value in ensuring the
functioning of the single market in the field of the agro-food sector while
applying agreed European common standards such as food safety and animal
welfare within a context of increasing competitive pressure.

A common policy and the reforms it has
undergone have led to increased competitiveness and sustainability of European
agriculture.

Market measures in the management of the
dairy crisis

The global dairy crisis, which generated a sharp
drop in dairy commodity prices in 2008 and early 2009, affected very significantly
farmers' income across the whole EU. The efficient and targeted use of CAP
market measures (EUR 371 million for the 2009 budget year), prevented EU
commodity prices from falling below the reference price levels, thus shielding
the EU dairy sector from the more pronounced price drop on the world market.

The timely and flexible implementation of the
common market measures - including the extension of the intervention buying in
period for butter and skimmed milk powder as well as advanced and extended
period for granting private storage aid for butter - proved to be an effective
tool to stabilise EU dairy markets and contributed to reducing the impact of
the dairy crisis on farmers` revenue. Overall, seventeen[23] Member
States were involved in the various storage schemes that reduced supply
pressure on EU markets, contributing to the stabilisation of commodity prices. In
the absence of a common policy toolkit, the diverging response of different
national polices would have aggravated the situation, causing disproportionate
market disturbances and distortions across Member States and potentially on the
world market.

6.2.3.
Ensuring trade compatibility

The CAP helps the EU to pursue a consistent
trade policy vis-à-vis our global trading partners, most notably by enhancing
its bargaining power.

The common set of rules for CAP support, in
particular through the granting of non-trade distorting decoupled direct
payments which represents the bulk of public support, enables the EU to
strengthen and consolidate its position in its negotiations with its trading
partners. The progress that has been made at international level through the
conclusion of trade agreements could have been jeopardised if, in the absence
of a common EU policy, diverging national policies had prevented compliance and
compatibility with the required rules and criteria (e.g. Member States might
have opted for the continuation of a considerable amount of coupled support at
national level).

6.2.4.
Ensuring cohesion and solidarity

The combination of the CAP instruments (both
EU-wide support instruments and targeted rural development policy measures) provides
a significant contribution to cohesion and solidarity between Member States and
regions. This was particularly evident during the EU enlargement phase and is
still valid today.

The instruments of the CAP in general, and
rural development policy in particular, offer a wide range of types of support
designed to help unlock the potential vitality of the farm sector and rural
areas across the EU: economically, environmentally and socially.

For example, support is available for training,
for investments in farm modernisation – including for semi-subsistence farms in
the new Member States – product development, preservation of landscapes and
ecosystems, tourism, business development, village renewal, cultural heritage
and the provision of essential services. These types of support work in
combination to enable rural areas to develop in a balanced fashion – a need
which is especially clear in various regions which are lagging behind.

The added value of the CAP comes partly from
the fact that it provides one common legal reference and policy framework. This
places a vast reserve of experience and tested policy approaches at the disposal
of all Member States and regions. It also helps to ensure that, to a large
extent, Member States follow common aims with regard to farming and rural
areas, instead of implementing separate national policies which could compete
with and partially nullify each other.

The added value of the CAP in this context also
lies in financial solidarity. A common policy has provided the funding
necessary to implement valuable policy measures across the EU. If Member States
were thrown back on their own financial resources, many of them would not be in
a position to help their farm sectors and rural economies along the path of
sustainable development. This problem would have been especially acute after EU
enlargement, and there would have been a significant danger of over-rapid and
poorly managed restructuring (e.g. with a rural exodus and serious damage to
the environment).

6.3.
Bringing the barriers down

Some of the challenges which face rural areas
are intrinsically cross-border in nature, especially environmental challenges.
As has already been mentioned, the CAP helps to address these challenges at the
most efficient level – which is the level of the EU.

This support comes especially through the
"Leader approach", which focuses on innovative solutions designed by
a wide range of people who perceive that they have a common interest.

Transnational Cooperation in the Wine
Sector: promoting local wine products and businesses (Luxembourg, France,
Germany)

High
quality wine has been produced in the Moselle valley for some 2 000 years. The
valley covers 3 countries and local producers all face similar problems:
unpredictable climate, difficult terrain and a challenging market for wines.
Realising their mutual interests are based on strengthening competitiveness in
their local wine sectors, producers from Leader territories supported under the
rural development policy (local action groups) located on the Luxembourg,
German and French banks of the River Moselle decided to set-up a TNC (transnational
cooperation) project to work on the topic.

Core
objectives are: 1) Initiate and sustain transnational collaboration between
local vintners and wine-growers; 2) Increase the value-added of local products
through cross-border actions (evaluation, processing, presentation and
marketing) in support of Moselle wine from this unique landscape; 3) Maintain a
European wine cultural landscape, and; 4) Create a cross-border identity for
vintners and wine producers in this famous European valley.

Early
business development outcomes from the Leader initiative identified
opportunities for making use of the Moselle wines’ distinctive international
identity. Results are helping the Terroir Moselle partners to promote their
products as “the most European of all wines” – so called because of their tri-country
characteristics. This unique selling point is now being used as an advertising
tool and special attention is given to markets outside the Moselle region.

The EU budget contributes €137500 to this project
out of a total cost of €250000.

6.4.
Critical mass

The creation of quality labels such as
geographical indications and the EU organic farming logo has helped generate a critical mass of quality and
safe products all across the EU. The harmonised legal framework and incentives
have motivated farmers to develop a common type of market, which shares similar characteristics and standards demanded by EU consumers. The role of the CAP in supporting local farmers to create quality
and environmentally friendly products (e.g. organic products) and develop a
market for them was crucial, and now many other farmers
have been encouraged to follow
this kind type of production.

7.
European Added Value in Education

Different strengths and different traditions
give Europe an opportunity to harvest real gains from pooled experience in education
and training. But this potential is best unlocked through mobility and
mobility can only be effectively handled at EU level. It cannot be delivered
unless there is an EU-wide network capable of turning the strong demand for
student mobility into reality.

The added value of Union level support comes
from the transnational character of the activities in the field of
education and training that are additional to national or regional support
structures.

·
Offering individuals the opportunity to
experience other countries and cultures not only improves their employability
but also promotes a more European-minded, flexible and mobile workforce that
improves Europe's competitiveness and innovation potential.

·
Increasing the mobility capacity of workers
across fragmented labour markets has an impact on the structural employment
rates in an area of free movement of capital.

Only EU programmes can guarantee that all
Member States can benefit from mobility and exchanges of good practices in this
field. In addition, the European action ensures optimal dissemination of
results.

The Erasmus Programme

Erasmus devotes €500 million annually to
part-funding the transnational learning mobility of university students and
staff. Since 1987, with very low administrative costs, the programme has
provided grants to more than 2 million students; today it supports over 200 000
Erasmus students every year, and the 3 million mark should be achieved by 2013.
Erasmus also support over 40 000 members of university staff every year. The
programme enhances the skills, adaptability and employability of students,
strengthening the openness and efficiency of labour markets; it enhances
professional development for staff members, improving the effectiveness of
European higher education.

Beyond promoting personal development, Erasmus
represents strong European added value: it has triggered systemic changes in
European higher education institutions. The programme has led universities to
strengthen and systematise their management of international cooperation, which
in turn has led to the creation of the European Higher Education Area (EHEA)
via the Bologna Process. With 47 participating countries, the EHEA now
stretches far beyond Europe's borders, enhances the convergence of degree
structures (Bachelor-Master-Doctorate), and facilitates the mutual recognition
of studies carried out abroad (ECTS credit transfer system). Erasmus also contributes
directly to the consolidation of mobility infrastructure for the 1.5 million
young Europeans who study outside their home country, who represent over half
the number of foreign students worldwide whereas the EU represents less than
10% of the world population.

E-Twinning

This is an excellent example of strong EU added
value and impact combined with cost-effectiveness. With a small annual budget
of around €10 million, eTwinning has successfully brought together 33
participating countries and created an active and constantly growing community
of over 130 000 teachers. With eTwinning, teachers from across the EU and
beyond communicate, share resources, experience and good practice, and set up
projects with their pupils in a safe internet environment. More than 5000
eTwinning projects, involving over 12 500 schools and around 225 000 pupils are
currently running.

Rather than directly financing individual
projects, eTwinning provides a virtual infrastructure for transnational
networking, training and support, which has two key impacts. Firstly, costs are
kept to a minimum (€76 per teacher, €44 per pupil), as eTwinning is a catalyst
for developing European cooperation projects which are funded nationally. These
projects often receive media attention and recognition and are thus highly
visible; value-for-money increases yearly, as an increase in the number of
projects and activities does not require an increase in the EU budget
contribution. Secondly, with its very large participation, eTwinning provides
strong EU added value by contributing to objectives shared by all Member
States, including ICT uptake and pedagogical innovation. The eTwinning platform
also ensures systemic impact as it facilitates institutional modernisation and
transnational partnerships between education providers. The scope of the
eTwinning platform could be extended beyond the schools sector in the next
generation of EU education programmes.

The Baculit project (reading literacy)

The level of reading literacy skills among school
students across the EU is not improving, and in some cases is even declining.
At a very small cost of €300 000, the Baculit pilot project of the Comenius
Programme brings together partners from 8 Member States to promote reading
literacy.

The project has significant potential to foster
transnational cooperation and impact, at a very low cost: every year, on a very
conservative estimate, the project's teachers training module will reach an
average of 700 subject teachers in each participant country; more importantly:
since teachers are multipliers, at a cost of only €1.5 per student, the Baculit
project will change the way in which 70 000 pupils in the eight countries get
support to meet the reading challenges of secondary education. Beyond this, the
project will have strong EU added value, by leading to the establishment, for
the first time ever, of an overall curriculum and a minimal standard for
in-service training in reading skills for teachers.

8.
European added value in Culture and media
8.1.
Notion of EU added value in culture and media

Cultural cooperation at EU level seeks to
ensure that culture makes its full contribution to both a competitive economy
and an inclusive society. As provided in the Treaties, action by the EU shall
be aimed at encouraging the cooperation between its Member States so that it
contributes to the flowering of their cultures while respecting their national
and regional diversity, and at the same time bringing their common cultural
heritage to the fore. The action by the Union is therefore complementary to, supporting
of and supplementing action by the Member States. At the international level,
the Union plays the role of partner in the preservation and promotion of
cultural diversity as well as in the development of dialogue between peoples
and cultures.

The essential added value of the Culture
Programme is its contribution to a greater awareness of the existence of a
common European heritage, to intercultural dialogue, to awareness of the
diversity and richness of European cultures, the promotion of the transnational
mobility of artists/cultural professional and of their works. In line with the
Europe 2020 strategy, creative industries supported by EU action (e.g. European
Capitals of Culture, translation of fiction, EU Prizes, etc) contribute to
innovation, to jobs creation and to local and regional development.

The main community instrument in this domain is
the MEDIA 2007 programme (2007-2013), the objectives of which are to strengthen the competitiveness of the European audiovisual
industry, to encourage the transnational circulation of European audiovisual
works and to reduce imbalances between European countries to preserve and
enhance cultural diversity. The audiovisual sector is
rapidly growing under the influence of new technologies, new players and an
increasing number of participating countries. The programme supports training
for professionals, the development and the cross-border circulation of European
audiovisual works (e.g. 300 new films representing 50% of European films
displayed on screen every year) in highly fragmented national markets that
suffer from the lack of financing and capitalisation.

Support to films

"The King's Speech": the film received four Oscars at the 83rd Academy Awards ceremony
in Hollywood. It scooped the big prizes for Best Picture, Best Director (Tom
Hooper), Best Actor (Colin Firth) and best original screenplay (David
Seidler).The project received €562 000 in distribution support from the EU
MEDIA fund for cinema. Tom Hooper made 'The King's Speech' on a shoe-string
budget by Hollywood standards, for less than €11 million. The funding the film
received from MEDIA aims to encourage distribution outside the country where it
was made – in this case, outside the UK.

"In a Better World": this is the third Danish film to win the best foreign language
category after 'Babette's Feast' (1987) and 'Pelle the Conqueror' (1988),
received €540 000 from MEDIA for distribution support. Two other EU-backed
films were also nominated for Oscars – 'Dogtooth' (Yorgos Lanthimos, Greece,
best foreign film category) was awarded €21 000, and 'The Illusionist'
(director: Sylvain Chomet, UK/France, best animation category) received
€126,000

The new Media Mundus programme supports
cooperation between professionals from the EU and from third countries. It will
provide consumers with a larger choice by bringing more culturally diverse
products to European and international markets and will create new business
opportunities.

As from 2011 the new MEDIA Production
Guarantee Fund is operational. This is an instrument aimed at supporting
and facilitating the access of the professionals of European audiovisual
companies to bank credits.

8.2.
The economic impact of EU action in this field

The added value of action at EU level measured
throughout the leverage effect of the MEDIA 2007 programme is very significant.
Despite a limited annual budget of €100 million i.e. around 0,1% of the size of
the market, MEDIA has achieved significant results by targeting its
actions on specific areas.

One can estimate that one euro from the Media
Programme invested in the distribution of a project triggers the generation of €6
from private financing sources. Without the EU intervention, neither the
decreasing market share of the European cinema (30% worldwide) nor the still
modest distribution of non-national European films (9% EU-wide) would resist
global competition and both would be considerably lower.

–
For example through the network Europa Cinema,
MEDIA supports the programming of European films in European cinemas. The
network includes 1813 screens across the 32 countries members of the MEDIA
Programme, representing 20% of first-run screens available in Europe. Their
quality programming has attracted 59 million admissions (against 30 million in
2000) representing 5.6% of total admissions in Europe (2,8% in 2000) and 11% of
admissions to European films.

–
The proportion of non-national European films
programmed in the network reaches 36%), against an average of 7-8% in Europe.
European films account for 57% of admissions to Europa Cinema screenings,
against a European average of 21.1% . On the basis of that difference, it can
be estimated that without MEDIA support, admissions to European films would
decrease from 33 million to 16 million, representing a € 100 million loss for the European film
industry as a whole.

The multiplier effect of the MEDIA support in
the cinema theatres sector can be estimated at € 13
revenue generated for each euro invested.

9.
European Added value in environement and climate
action

Most environmental problems have a cross-border
or transnational nature and cannot be solved by Member States acting alone
without international cooperation. Member States need to join forces and create
partnerships with stakeholders to tackle these problems which, if not solved,
may later come at a great cost for the EU as whole. The LIFE programme attracts
partnerships that otherwise would be difficult to set up ensuring a more
effective intervention than Member States individual action by an increased
pooling of resources and expertise.

Some EU environmental problems are better addressed
at regional or local level, also because some EU environmental assets are much more
localised while other issues, such as climate changes, are global by nature.
Local solutions can be replicated in other areas or transferred to sectors
facing similar problems. LIFE provides the platform for development and
exchange of best practices and knowledge-sharing allowing Member States and
stakeholders to learn from each other and address the environmental problem
more efficiently.

Environmental assets are unevenly distributed
across the EU but benefit the whole of the EU. The EU level the legal
obligation to preserve them calls for a consistent application of the principle
of responsibility sharing and solidarity.

LIFE helps Member States and stakeholders to accelerate
and improve the implementation of EU legislation by finding more cost-effective
ways to address environmental problems and by creating synergies across EU
funds and national funds while levering in additional national and private
sector funds to ensure the continuation of activities financed under LIFE or
expanding their results. LIFE has created partnerships between different Member
States' authorities and specialists in communication to develop campaigns that
raise awareness among authorities, citizens and the private sector on the need
to adopt more sustainable practices. Without LIFE, the geographical impact of
such campaigns would have been much more limited.

The PERBIOF project

Wastewater treatment plants face recurrent
problems such as sludge production and toxicity of treated effluents in the
tannery sector. The PERBIOF project developed at demonstration scale an
innovative technology for treating municipal and/or industrial wastewater. The
high compactness of the plant in comparison with traditional plants meant the
footprint is only 25% of that of a standard plant and sludge production is
about one thirtieth of the amount produced by a traditional plant. Although
investment costs are 10% higher than for a standard plant, operating costs are
one-third of those of a standard plant.

With a contribution of €625.000 over 3 years from
the LIFE programme, this project is due to generate €72 million per year in
cost savings by the tannery industry. The project yields a Net Present Value
(NPV) over 10 years, discounted at 4%, of €655 million. This is equivalent to
over €1,000 in benefits generated for every €1 spent in the LIFE programme.

Changing behaviours

European day 'In town, without my car?' (subsequently becoming the European Mobility Week): In
2002, the campaign succeeded in establishing a truly European initiative with
320 cities from 21 countries taking part in European Mobility Week. A second event
held in September 2003 consisted of a week-long series of awareness-raising
events focusing on various aspects of sustainable mobility. Mobility Week
succesfully continues taking place in Europe and is now spreading to the rest
of the world via grassroots networks.

The European Week of Waste Reduction. The LIFE project EWWR aims to reduce the amount of
waste generated in the EU by mobilising all relevant actors in a EU-wide
awareness-raising campaign and changing behaviours of different stakeholders in
their waste generation. Five Member States have joined together to develop a
common strategy as well as tools to carry out awareness-raising activities on
recycling around the EU over one week every year. In 2009, 2,672 initiatives
were carried out, in 2010 there were 4,346 in 24 countries reflecting the
success of the event. In 2011 expectations are even higher.

10.
European Added Value in Health and
consumers
10.1.
Health

The value of investing in preparedness,
prevention and coordination of measures on health threats and communicable
diseases at EU level was clearly demonstrated in the H1N1 outbreak in 2009.
Strengthening the capacity to manage serious cross border health threats, as well
as the joint procurement of pandemic vaccines is also an area where significant
EU added value can be obtained. The EU can also deliver significant benefits on
cross-border issues such as cross border healthcare, health inequalities and
from developing strategies to counter growing anti microbial resistance,
development of cost-effective health technologies and innovative healthcare,
and the promotion of healthy ageing through an European Innovation Partnership.

Actions under the Public Health programme
complement and add value to Member States' actions in the area of health
promotion and prevention of illness (including work e.g. on nutrition and
smoking; reduction of inequalities in health care), protection of citizens
against health threats, in particular pandemic preparedness, the safety of
medical products, blood, tissues, cells and organs) and co-operation between
health systems.

Rare diseases
are diseases with a particularly low prevalence affecting not more than 5 out
of 10 000 persons in the European Union. This means that between 5.000 and
8.000 different rare diseases affect or will affect an estimated 6-8% of the EU
population which translates into 29-36 million people in the European Union.
The specificities of rare diseases - limited number of patients and scarcity of
relevant knowledge and expertise - single them out as a unique domain of very
high European added-value.

The ORPHANET data base

The Orphanet database, funded by the European
Commission (€6 million) allows access to information about 5.868 rare diseases.
Any patient or health professional can receive information about all the
clinics, hospitals and specialists able to treat the disease throughout Europe as
well as information on available orphan drugs, ongoing clinical trials, best
practices sheets, patient's associations, registers, etc. This type of effort
is impossible to do at national level and permits sharing knowledge and best
practices for every rare disease. European cooperation can help to ensure that
scarce knowledge can be shared and resources combined as efficiently as
possible, in order to tackle rare diseases effectively across the EU as a
whole.

The creation and operation of the data base cost
€6 million. For a cost of €0.20 for each of the 30 million EU citizens
suffering from a rare disease, this enables access to the data base allowing
for better information on management and cure of the disease.

Cooperating on cross-border diseases such as H1N1 flu also cannot be undertaken by individual Member
States, and depends on initiatives and funding at EU level. In the area of
health threats, EU's role, beyond the coordination of the answers to theses
threats, is also to enhance the capacities of the Member States and of third
countries to answer these threats. The rapid and coordinated answer to global
health threats is also EU's role.

The Public Health Programme has developed and
strengthened networks among European health specialists, national and
regional health authorities and other stakeholders that greatly contribute to
knowledge sharing and building health capacity in the EU. It also builds
consortia, partnerships and other forms of interchange of information and
practices across Europe, thus boosting cooperation and the pace of research.
The outcomes of the projects and actions funded by the Public Health Programme
constitute the most effective, if not the only way to build the evidence base
for defining much broader regulatory policies (for instance on cancer,
Alzheimer, rare diseases and health inequalities).

The cancer screening guidelines

Cancer screening guidelines were developed
through EU level cooperation between highly qualified experts across the EU.
This could not have been achieved by Member States operating separately and
individually without substantial financial and human resources inputs. The
guidelines now represent the official health care quality standard at European
level. By implementing the Guidelines Member States have the potential to
organize their health systems more effectively and efficiently.

The guidelines have been implemented in the
Member States to mandate population-based screening programmes thus improving
the diagnosis and management of cancer. Early detection can save billions of
euros in subsequent care.

The cost of development at EU level of the
guidelines on breast and cervical cancer screening was €21 million. Had the
guidelines been developed at the level of the 27 Member States it would have
cost significantly more and resulted in 27 different guidelines in the 27
Member States. For a cost of less than €0.05 each EU citizen has the comfort of
knowing there is a standard for early screening and detection of cancer.

In the area of animal health, major
animal diseases can have a devastating economic impact, and can also impact on
public health. Diseases do not stop at borders. The EU allocates around €300
million per year to co-finance annual or multi-annual programmes to control and
eradicate a number of diseases. Despite the emergence of new diseases such as
bluetongue, the EU health status has continuously improved, also in the new
Member States, with a positive impact on the functioning of the internal market
in live animals and food of animal origin, on EU export possibilities and on
consumer confidence. Support at EU level is important as the impact is
cross-border whereas the costs are to be shouldered generally by one Member
State alone.

Fighting swine fewer

Classical swine fever is a major disease of pigs
and wild boar which caused devastating outbreaks in the 1990s in several EU
Member States. The direct and indirect losses from the outbreak in the
Netherlands in 1997-1998 were estimated at around €2 billion. Since the
mid-1990s the EU allocated around €218 million for emergency eradication and
surveillance. The disease situation has improved considerably, with no major
outbreak during the last ten years, leading to a virtual eradication of the disease
in most of the EU, and a substantial improvement also in the new Member States.
This intervention has led to major savings: each euro spent at EU level has a
potential cost savings of at least €9 for the budgets of the Member States.

The European Union Reference Laboratories
(EU-RLs)[24]

A network of European Union and National
reference laboratories (EU-RLs) dealing with major animal diseases has been set
up with scientific and technical expertise within the areas of animal health,
public health and zootechnics. In order to protect
public health, potentially hazardous residues and contaminants are put under
vigorous scrutiny and strict authorisation procedures for new additives and
crops for feed and food production are in place. The aim of EU-RLs is to
guarantee uniform detection, quantification and authorisation procedures. The activities of EU-RLs cover all the areas of feed and food law
and animal health. The main objective of the EU-RLs is to contribute to a high
quality and uniformity of results obtained in the various official food and
feed control laboratories throughout the European Union.

EU-RLs also represent a unique platform for
information exchange on analytical methodology and quality assurance tools for
control laboratories. Together with the network of NRLs, they provide a pool of
knowledge and facilities that makes them best placed to handle emerging issues.

In the area of plant
health, outbreaks of serious plant diseases may cause major losses to
agriculture, the EU economy, environment and landscape. Such problems can
rapidly spread between Member States with intra-EU trade and impact the entire
EU market. A weakness in any part of the chain in the internal market may
result in spread of harmful organisms in the entire internal market.

Member States may receive EU co-financing for
expenditures relating to eradication and containment of regulated harmful
organisms of plants. Large-scale eradication actions by Member States for
outbreaks are very difficult without EU support as an individual Member State
has to bear large costs the effect of which to much extent are in the benefit
of other Member States and the Union as a whole.

Pine wood nematode

For plant pests of major importance to the Union
such as pine wood nematode, the eradication costs of Member States are in the
range of €1 to €10 million per outbreak. The EU contribution approved since the
start (1999) is €27 million for assisting in the eradication of this pest.
Studies show that 10-13 million ha of pine forest in the south of Europe is
threatened with a mortality of 50-90% and an annual economic loss for the Union
of up to €400 million and a cumulative loss over the life cycle of the
endangered forest of up to €90 billion. These amounts do not include the
effects on the related wood industry nor the effects of expected quarantine
trade restrictions by third countries.

Inaction at EU level in animal and plant health
would undermine the internal market for the most basic of consumer goods –
food. Each Member State would have its own standards and control leading to a
fragmentation in the free flow of food and animal products thus undermining the
sustained growth and potential of the largest industry in the EU – the
agro-food industry.

10.2.
Consumer Policy

EU actions and coordination is essential to
ensure that products in the Single Market are safe, that consumers are provided
with the right information, can get access to redress when things go wrong and
have their rights enforced when buying cross-border. The
essential coordinating role of the EU in consumer policy depends on initiatives
and funding at EU level. Without this coordinating role, Member States' actions
would naturally be confined to their national borders and the single market for
consumers and businesses that the EU is aimed at strengthening would be
undermined. Moreover the high level of consumer protection in Union policies that
is advocated by the Charter of Fundamental Rights would not be assured.

The European added value of consumer policy
spending is particularly visible in terms of increasing consumer safety,
providing consumers with information and education on their rights, ensuring
redress and enforcement of consumer rights through coordinated actions throughout
the EU. For example, the financing of European consumer organisations
representing consumer interests at EU level and the gathering of evidence
through scoreboards and in-depth market studies ensures that consumer interests
and consumer protection requirements are known and are taken into account in
defining and implementing EU policies and activities as prescribed by the
Lisbon Treaty.

Through the EU budget the Commission supports the
coordination of actions in the Member States in the field of consumer product
safety and runs an EU database for rapid alert on dangerous consumer
products (RAPEX). Coordinated actions for ensuring safety at source are also
undertaken in cooperation with the main world trading partners, notably China
and the US. The enforcement of product safety by Member
States requires coordination at the EU level to ensure effectiveness in ever
more complex markets and supply chains across Europe and the world. Compared to
a series of individual actions by the Member States, EU action allows filling
in information gaps and avoiding disparities in the Single Market.

RAPEX

The number of measures
taken against dangerous products and reported through RAPEX by Member States is
constantly increasing; in 2010, in total 2,244 notifications were sent (a 13%
increase compared to 2009). Main product categories for notifications were in
2010: clothing and textiles, toys and motor vehicles. Most common risks:
injuries, chemical and strangulation.

RAPEX also enables the
EU to support with good data the requests made to China to improve the quality
and safety of Chinese origin products placed on the EU market.  This is
important knowing that China is the country of origin in approximately 60 % of
the RAPEX notifications and in some categories (e.g. toys) the figure is even
higher. Up to day, in total 5469 RAPEX notifications were submitted to Chinese
authorities for a follow-up. So far, Chinese authorities have reported
conclusions of their investigations carried out with regard to 1,386
notifications; in 795 investigated cases, Chinese authorities decided to take
restrictive measures, including an export ban.

Regarding information to consumers on their EU
rights across the Single Market the network of European Consumer Centres has
proven particularly effective.

The network of European Consumer Centres

The ECC-Net was established and is co-financed at
50% by the Commission at an annual cost of around 3.5 million Euros. It
provides a unique European network to inform citizens about their rights when
shopping across-borders; and to support them in seeking redress with a trader
in another EU Member State (plus Iceland and Norway) when something goes wrong.
Governmental structures and national civil associations do not help consumers
in cross-border cases. The system works because the network covers all Member
States (EU dimension). Considering that the Member States' actions normally
target the national market only, there would be no similar support to consumers
shopping cross-border without action at EU level.

In 2009, cross-border expenditure amounted to 175
billion euros in the EU. The amount spent by consumers on cross-border internet
shopping is estimated at 30 billion euros for the same year. In total, these
expenditures represent 1.75% of EU GDP.  As the total detriment suffered by EU
consumers amounts to 0.4%, the detriment related to cross border shopping
(including internet) can be estimated between 500 million and 1 billion euros.

In 2010, ECCs helped consumers clarify their
claims for an amount of 14 million euros, and the volume of cases handled by
the network has increased by more than 25% over the last 5 years. The services
of the ECCs present a positive cost-benefit balance. Every Euro invested helped
consumers to settle 1.77 Euro worth of complaints and contributed also to the
establishment of a level playing field for business operators.

11.
European Added Value in Transport

Trans-European networks in transport are some
of the best examples of the value the EU can bring to its citizens and its
Member States. The Trans-European Transport Network
(TEN-T) covers road, rail and inland waterway networks, seaports and inland
waterway ports, airports and other interconnection points between modal
networks. As the full functioning of the internal
market and the achievement of the Europe 2020 strategy depend on access to
transport infrastructure for individuals and companies, EU funding helps to
join up missing links and remove bottlenecks.

TEN-T complements national funding: in
transport, the EU budget finances EU public goods with strong interdependencies
that Member States and regions could or would otherwise not finance themselves,
or where it can secure better results. The TEN-T
Programme has a budget of €8 billion for the current financial framework
(2007-2013). Cross-border infrastructure links up
Member States' networks and complete connections that would not otherwise
exist. The European dimension of TEN-T policy can maximise the efficiency and
effectiveness of Member States' finances and help reduce their total
expenditure.

The development of effective transport networks
is central to a successful economy. Competitiveness gains in other sectors can
be squandered if infrastructure is dogged by problems like congestion. As the
European economy has become more integrated, the costs of poor infrastructure
have grown and the cross-border deficiencies have become more obvious.
Allocating resources at European level is the only way to redress the natural
preference for directing national spending to schemes which start and finish
within national boundaries. It also provides an opportunity to help the
less-developed economies of Europe to develop infrastructure of benefit to all
Member States.

TEN-T makes a key contribution to growth and
jobs. Infrastructure investment spending creates about 18,000 jobs for
every $ 1 billion in new investment spending (direct, indirect and induced
jobs).

The Oresund fixed link

The Öresund bridge is a combined two track rail
and four lane road bridge-tunnel across the Öresund straight. It is the longest
combined road and rail bridge in Europe.

Works started in 1995 and the link was open to
traffic on 1 July 2000. The project cost was €2.7 billion and there were no
budget overruns. All funds for planning, designing, building and operating the
Øresund link as a whole are covered by road and rail fees. The repayment period
is approximately 30 years.

Rail travel has developed quickly with a growth
of 230% since 2001 with 11.2 million passengers in 2009. The construction of
Citybanan in Malmö and the perspective of the Swedish high-speed trains will
greatly increase the connecting rail capacity.

In 2009, 7 million vehicles crossed the Øresund
Bridge. The high increase in traffic is mainly a result of the increased
integration between the areas in both sides of the link. The traffic across the
bridge has increased 10 to 16 percent each year since the opening, although in last
two years, the recession has had an impact on the growth rates in traffic.

An important aspect of the Øresund
regionalisation is that an increasing number of businesses have activities on
the other side of Øresund. 10 Nordic headquarters were located in Scania and 18
Nordic headquarters were located in Copenhagen. The most successful examples of
cooperation are the Øresund University and the Øresund Science Region. The Øresund
fixed link demonstrates at what point infrastructure is the basis for the good
functioning of the Internal Market.

The EU budget contributed €127 million to this
project.

TEN-T makes also a key contribution in the fight
against climate change. A large share of TEN-T financed projects are
in more environmentally-friendly modes of transport and therefore allow for a
shift of passengers and freight away from the more CO2-producing modes.

The high-speed railway axis
Paris – Brussels – Cologne – Amstrerdam - London (PBCAL)

This is Europe’s first cross-border high speed
passenger rail project, linking major cities in France, Belgium, Germany, the
Netherlands and the United Kingdom.

The PBKAL (Paris-Brussels-Köln-Amsterdam-London)
network offers substantial reductions in journey times between the five
countries and therefore provides passengers with a real alternative to air and
road transport and will make a significant contribution to the promotion of
intermodal air-rail journeys, in line with Community transport policy
objectives. It enables improved connections between some of Europe’s key
airports - Brussels, Frankfurt, Cologne/Bonn, Paris Charles de Gaulle and
Amsterdam Schiphol. The PBKAL is a Priority Project
which has been completed with no outstanding financial or environmental
problems.

PBKAL is currently used by three international
operators: Thalys, Eurostar and ICE trains, as well as
fast internal intercity services.
The completion of the section between London and the Channel Tunnel in 2007 has
had a big impact on cross-border traffic and provided a real alternative to air
travel between London and cities in continental Europe. Eurostar
has become the dominant operator in cross-channel intercity passenger travel on
the routes that it operates, carrying more passengers than all airlines
combined. A large segment of Thalys's total sales and income comes from the
connection between Paris and Brussels. Airline companies no longer provide this
service, as taking the train is faster than flying. The
number of Eurostar and Thalys passengers increased from 6.5 millions in 1995 to
15.3 millions in 2009.

The EU TEN-T provided €720 million in funding
while the EIB lent €1.8 billion on a total project cost of €17.3 billion.

12.
european added-value in customs and taxation
12.1.
Customs Union

The EU customs union has been in place for more
than 40 years and has generated added value far beyond the remit of
European customs policy. In addition to collecting customs and agricultural
duties for EU Member States and the EU budget (exceeding €20 billion/year), it
supports Member States in the collection of VAT, excise duties and other
revenue and ensures the control of exports in order to avoid undue VAT or
excise refunds. Furthermore, it directly controls and implements other EU
policies such as transport, agriculture, sanitary or environmental measures.
The customs union increasingly manages the growing task of ensuring that goods
entering or leaving the EU territory are safe for consumers and the
environment. The customs union is also the frontline for ensuring the security
of the supply-chain, the fight against smuggling and fraud, and the enforcement
of intellectual property rights (IPR) at the border.

In managing the flow of goods, Member States
are subject to different levels of burden in implementing the customs union,
depending on geographical and historical factors such as key trade routes, type
and extent of external borders (maritime, land, air) or regional exposure to
smuggling and fraud. In contrast to the unevenness of the burden of
implementing the customs union, the benefits of the customs union, inside an
internal market with fully free movement of goods, are common and shared among
the people of Europe.

Taking account of the considerable and
unique value added to the Member States and the EU that the customs union
provides, there is a need for financial support from the EU budget. Concretely,
€1 euro invested centrally through the EU can generate a saving of € 4 for the
Member States.

The Customs 2013 programme

With a budget of €324 million over the period
2008-2013, the Customs programme is a key EU tool that enables the customs union
to function seamlessly as one, instead of a patchwork of 27 implementing
administrations. The Programme allows, among other things, the national
administrations to handle 7 customs declarations every second, totalling 211
million per year, without disruptions for imports and exports. Over one billion
information messages are exchanged every year between tax as well as between
customs administrations via IT systems covered by the tax and customs
programmes, with an average growth rate of 40% in the last 5 years. With the
help of this programme, 10 million trucks carrying third country goods
circulate in the EU territory annually with real-time customs control (from
departure to arrival and clearance) via 47 million electronic information
exchanges.

The European-wide secure computer network
interconnecting all customs and tax administrations costs €11 million per year
but generates annual savings of €35 million for Member States, because they do
not need to establish bilateral networks.

The central IT system which ensures that the EU
tariff rates and trade measures are available online on a daily basis (TARIC)
is another example of the enormous economies of scale that can be achieved
through EU management. Since 2007, the Commission has spent €3.7 million to
develop this system. If all Member States had developed their own systems,
costs would have totalled about € 80 million which gives an impressive ratio of
1 of 20, thanks to funding via the EU budget.

Another recent example is the economic operators
system (EOS) which stores information on 2.5 million legal entities registered
in the 27 EU Member States that come into contact with customs administrations.
Sharing this information between Member States avoids the need for economic
operators to register in each Member State to perform customs operations,
significantly reducing red tape and the cost of doing business. Development of the
system by the Commission cost the EU budget €5 million. Had it been developed
by each Member State separately, an estimated investment of €25 million would
have been needed. Entirely electronic handling (replacing paper for all
dealings with customs in all EU) offers further savings potential.

12.2.
Taxation

EU tax policy focuses on the elimination of tax
obstacles to all forms of cross-border economic activity. It also supports Member
States in their fight against tax fraud. The operational taxation work of
administrations has evolved from being limited to control within a Member State
before the internal market to cooperation between Member States after the
establishment of the internal market. Administrative cooperation between tax
authorities plays a key role ‘upstream’ in detecting and preventing fraud.

Combating VAT fraud represents a major
challenge for the EU. The overall annual VAT tax gap (difference between
theoretical and current VAT revenue) for the EU was calculated at € 112 billion
for the year 2006. From studies made within Germany and UK, it appears that
cross border VAT fraud is about 25% of the total VAT gap (around € 25 billion).
Cross-border VAT fraud would be much larger in the absence of massive electronic
exchange of VAT information between the tax administrations[25]. This represents billions of Euros in fraud avoidance.

Fraud avoidance – VAT

Using a centralised IT system, tax officers
across the EU exchange more than 400 million messages on VAT on cross border
transactions within the EU every year. With EU annual operational overall costs
of less than €20 million (€6 million from the FISCALIS programme) the EU budget
facilitates the detection of billions of Euros in VAT avoidance

In the excise field, since 2010, Member States
control on line[26] the more than 2.5 million annual movements of goods (cigarettes,
alcohol, energy products) which circulate under temporary duty suspension. In
many EU Member States, the sale of untaxed alcohol and cigarettes constitutes a
major problem. For example, according to a study undertaken by the UK
approximately 5% of sales of spirit drinks were sold untaxed in tax year 2007 -
2008, costing 171 million euro in lost revenue per year, in the same year
untaxed cigarettes represented between 7 and 16 % of sales between 800 to 2 500
million euro.)

Fraud avoidance –excise duties

The FISCALIS programme acts as deterrent in the
fight against excise fraud by making it much more difficult for goods under
temporary suspension of duties to be diverted from their declared destination
(about 97% of all excise movements in the EU are monitored). It is estimated
that the benefits hugely outweigh the cost of the IT system (annual overall
cost of €30 millions to which the EU budget contributes €4 million).

13.
European added value in enlargement and neighbourhood

The successive enlargement of the EU is by its
very nature a common task which can be pursued only at EU level. Only
the Member States acting together can decide on the accession requests by new
candidates. The pre-accession assistance provided through the EU budget is
designed to help candidate countries/potential candidates prepare for future
membership: IPA (Instrument for Pre-Accession) is built to give countries a
“test run” of obligations of membership before accession (such as put in place
institutions for managing structural and cohesion policies, or adopting the acquis).
No other multilateral or bilateral instrument can provide such a comprehensive
toolbox.

Pre-accession assistance and support in the
Neighbourhood region is an investment in the future of the EU, supporting the
stability and prosperity of neighbouring countries; ensuring the effective
capacity of candidate countries to implement the acquis upon accession
and help approximation and gradual integration in the Neighbourhood region.
Technical and financial assistance speeds up the process of preparation and
creates incentives for the necessary transformation of the society, the legal
systems and the economy. Such assistance helps meet the objectives of the
internal policies of the EU, creates opportunities for EU businesses and
provides tangible return on investment.

Without the intensive involvement and closer
partnership embodied in pre-accession assistance and support to the
Neighbourhood, the EU would certainly have to spend more on combating illegal
migration, securing the external borders of the EU, ensuring security of energy
supply and combating the effects of climate change and pollution. In recent years
EU member states have been reducing the level of their bilateral assistance to candidate
and potential candidate countries, acknowledging that coordinated action at EU
level is more effective. About half of the overall financial assistance of the
EU to the enlargement countries in 2009 came from the EU budget. Multilateral
donor organisations have largely phased out their support and those that remain
have now aligned their programmes to the EU's priorities.

Regional cooperation and reconciliation in
the Western Balkans

IPA funds have been the catalyst for Western
Balkan countries to embark in cross–border cooperation with the EU and with
their neighbours. IPA cross-border cooperation is helping Western Balkan
countries to overcome the legacy of the conflict of the past.

Under IPA, Western Balkans authorities prepared 8
bilateral cross–border programmes 2007–2013 (e.g. Croatia–Serbia, Bosnia
Herzegovina-Montenegro, etc.). Despite the lack of previous experience
implementation of cross border programmes (€ 86 million in total for the 8
programmes for the period 2007–13), resulted in extensive cooperation between
Western Balkans countries, in particular at local and regional level. In the
first four years (2007–2010) of implementation:

·
13,000 people were informed/trained during
awareness seminars and trainings on project preparation;

·
calls for proposals (2007–2008 funds) were over
subscribed by five times: 492 projects were submitted for a total value of € 97
million, out of which 86 could be financed;

·
1,800 institutions/organisations entered into
partnership relations and submitted jointly prepared cross–border proposals;

·
984 cross–border partnerships have been created.

Two more programmes were recently initiated
between Kosovo[27] and Albania and Kosovo and the former Yugoslav Republic of
Macedonia. A third one between Kosovo and Montenegro is also in the pipeline.

At borders between potential candidate countries
and member states, IPA provided the necessary funds (€276 million for
2007-2013) to match ERDF allocations on the EU side (€330 million)  to support 9
bilateral (e.g. Slovenia – Croatia, Bulgaria – Turkey, etc.) and 1 multilateral
(IPA Adriatic: Italy, Slovenia, Greece – Croatia, Bosnia Herzegovina, Montenegro,
Albania) cross–border cooperation programmes.

Neighbourhood Investment Facility (NIF)

The use of innovative financial instruments was
spearheaded in the Neighbourhood Region trough the creation of the
Neighbourhood Investment Facility (NIF). The NIF is a blending instrument
trough which EU budget grants leverage IFI loans to provide assistance in
support of the ENP objectives and its regional initiatives (Union for the
Mediterranean (UfM), the Eastern Partnership or the Black Sea Synergy). Since its inception in May 2008, the NIF has been funded with nearly
€308 million grant resources (€245 million from the EU budget, €62.5
million from the Member States) and has approved grant contributions to 39
projects for a total amount of about €277 million, contributing to leverage
over €5 billion loans from European Finance Institutions for a total
investment cost exceeding €10 billion. The NIF has
proven to be an effective tool for mobilizing extra support for ENP countries
(East and South) and it has also helped promoting donor co-ordination in the
Neighborhood region.

14.
European added value in the area of external action
and development policy

The EU is in a uniquely neutral and impartial
position to deliver assitance to thrid countries on behalf of and with Member
States.  The critical mass of EU assistance, combined with the capacity to
coordinate with the Member States, puts the EU in a better position to conduct
policy dialogue with partner governments and respond to global challenges.
Thanks to the large scale of activities and worldwide presence, the EU can
deliver help to the poor in some of the world's most remote areas; the EU has a
network of international agreements all over the world, not matched by
individual Member States, which gives them influence in almost all fields of
international relations. The EU can do more than other organisations, because
it do not just provide development assistance; it has a holistic approach to
development and external relations, as well as large variety of instruments for
e.g. the promotion of democracy, and mechanisms to respond to a crisis.

The EU is therefore best placed to take on the
role of global leader on behalf of its citizens, in areas such as poverty
reduction, and assistance to populations most in need following disasters; stability
and prosperity in our neighbourhood; peace, security and crisis prevention and
response, notably in most unstable countries; and EU values (human rights and
democracy, multilateral governance system).

Division of labour through the EU is a crucial
component of its added value. With its network of international agreements with
partners and organisations all over the world, the EU is a natural coordinator,
and can influence almost all fields of international relations, that individual
Member States cannot do alone.  At a time of budgetary restrictions, a more
coordinated and integrated approach between the EU and its Member States
through joint programming is being pursued tobring about more added value,
increased strength and legitimacy, and more impact and effectiveness.

As the world's largest donor, the EU and it's Member
States provide more than half of total aid to developing countries. Working
together as one is a priority.

Since 2004, thanks to the EU budget, in developing
countries:

–
More than 9 million pupils have been enrolled in
primary education

–
More than 720,000 primary school teachers have
been trained.

–
More than 85,000 new female students have been
enrolled in secondary            education

–
More than five million children have been
vaccinated against measles.

–
More than 4 million births were attended by
health personnel

–
More than 5000 health centres and facilities
have been built or renewed

–
750 000 people with HIV have received
antiretroviral combination therapy

–
7.7 million people have been given
insecticide-treated nets

–
More than 31 million people have been connected
to drinking water and 9 million to sanitation facilities

–
36 000 km of roads have been constructed or
maintained

At last year' Millenium Development Goal
Summit, the EU demonstrated once again that it is leading the way in helping to
meet the Millennium Development Goals. The European Union confirmed its
commitment to meet the 0.7 percent GNI (Gross National Income) target by 2015
and to assess progress on this every year.

The African Peace Facility (APF) is a prime example of how the EU can take the initiative on
an issue, involving Member States as well. Most Member States do not work in
this area, but through the EU they are able to channel their contributions in a
simple and fast way. Since 2004, the EU has provided €740 million, helping to
prevent conflicts and promote stability after they have taken place.

The Food Facility is another unique project which only a donor with the critical
weight of the EU was able to put in place. Established in December 2008 as a
rapid response to soaring food prices in developing countries, it made an
additional €1 billion available for projects and programmes in 50 target
countries during the period 2009-2011. So far it has helped around 50 million
people. The Food Facility demonstrates Europe’s ability to react rapidly,
efficiently and transparently to a global food security crisis, on a scale
which Member States would find not possible to match.

The Vulnerability FLEX (V-FLEX), launched by the European Union in 2009, has helped
between 40 million and 80 million people in developing countries at risk of absolute
poverty because of the global economic crisis. €434 million out of the €500
million allocated under the mechanism in 2009 and 2010 have been disbursed. 17
of the poorest African and Caribbean countries have benefited.

Promoting sexual and reproductive health
and rights in 22 African, Caribbean and Pacific countries

The European Commission has provided €32 million
in assistance to 22 African, Caribbean and Pacific (ACP) countries over a
period of 6 years to help fight poverty and to increase access to and quality
of sexual and reproductive health services and commodities to the most
vulnerable and underserved people. The programme was developed in line with the
ACP-EU Partnership Agreement to promote the development of a common strategic
approach to poverty reduction.

As a result, more than 1.6 million people
received sexual and reproductive health services and some 750 professional
staff as well as 3 400 volunteers were trained. More than 8 700 medical teams
and 21 500 non-health professionals were trained on sexual and reproductive
health topics boosting the capacity in reproductive health among health care
workers.

Poverty Alleviation Budget Support
Programme in El Salvador (PAPES)

El Salvador is a country with serious social and
territorial imbalances. Improvement was needed in basic services such as
education, health, nutrition and infrastructures (drinking water, electricity,
sanitation, roads and housing), particularly in rural areas. The EU
contribution of €37 million for the period 2005-2010 benefitted the 100 poorest
municipalities of El Salvador. The programme was run in partnership with the
agencies for development of Spain, Germany and Luxembourg, and some
international organisations such as the UNDP.

The impact has been an extension of health
services to 81 municipalities benefiting 413.000 people; more than 250.000
inhabitants of local communities, as well as schools, have benefited (rural
roads, schools, health units, bridges); in the 32 municipalities classified as
in severe poverty, there has been an increase from 65% to 77% of population
with access to sanitary services; an increase from 66% to 81% of schools with
access to electricity and from 57% to 85% of schools with access to drinking
water.

The EU also actively promotes interpersonal
relations across continents, to the mutual benefits of the EU and partner
countries.

The Erasmus Mundus Programme

With a budget of €900 million over the period
2004-2010, Erasmus Mundus has supported
more than 1000 universities from over 100 countries, and thousands of students
and scholars from 170 countries. The programme has deployed an extraordinary
range of world-wide mobility measures: the setting up of 148 Masters courses
and 24 Joint Doctorates involving some 400 EU and over 600 non-EU universities
from over 100 countries; the mobility of students (over 30 000) and scholars
(1600) from over 170 countries. Erasmus Mundus has attracted participation from 76 of the top 100 EU
universities in the 2010 Shanghai ranking.

The programme has strong European and
international added value, by developing integrated, high quality transnational
Masters and Doctoral levels degrees. It has strengthened institutional and
systemic reform via the Bologna Process (e.g. by facilitating degree
recognition beyond the EU). Erasmus Mundus ensures "Europeanisation"
of supply (as universities from different countries work together), and "internationalisation"
of demand (as EU universities attract non-EU students and modernise traditional
recruitment patterns).

15.
European added value in helping victims of
humanitarian crisis in third countries

EU humanitarian aid and civil protection
assistance outside Europe are an expression of solidarity with the victims of
disasters and conflict in third countries. By their very nature, they generally
constitute the first concrete response by the Union to crisis situations
outside Europe. The nature and the complexity of humanitarian disasters have
been increasing over the past decade, with an economic cost in 2010 estimated
at approximated €100 billion. Humanitarian needs are likely to increase sharply
over the coming years: it is expected that by 2015 the number of persons
affected by disasters due to climate change alone will grow by 375 million
yearly. Water shortages caused by drought, already affecting 884 million
people, will be exacerbated further. The need for food assistance is set to
increase. The predicted increase by 2050 in the global population to over 9
billion can only put more pressure on humanitarian needs. Europe, already a
significant player in the provision of humanitarian aid, will need to do its
bit to help meet these increased needs.

EU Member States are important actors in
humanitarian aid in their own right, and in the area of civil protection the
Union's role is primarily to facilitate and accompany their action, but the
Union can add value in several respects:

–
It has the critical mass to be able to maintain
an extensive network of humanitarian field experts (more than 100 based in
areas affected by or vulnerable to crisis), able to provide reliable
information (e.g. by drawing up regular situation reports) on humanitarian
needs both to the Commission and to Member States.

–
It can facilitate and coordinate action by the
Member States where this is considered useful, particularly in the area of
civil protection. To this end, the Union has built up the EU Civil Protection
Mechanism, with the Monitoring and Information Centre (MIC) as its hub, working
closely with Member States to dispatch expert teams composed of Member State
and Commission experts very rapidly to disaster areas to assess needs and
channel European assistance to where it is most needed.

–
It can provide assistance not only in the small
number of crises which happen to attract significant media attention, but can
also help people in so-called "forgotten crises", where other donors
may not be able to devote significant resources. In 2010, the Commission provided
16% of global humanitarian aid, making the EU budget the second-largest donor
worldwide, and reaching over 151 million people.

The EU's contribution to humanitarian crises
was most recently assessed positively by the March 2011 multilateral aid review
undertaken by the United Kingdom, which recognises the Commission to be strong
in the delivery of humanitarian aid, acknowledges the value of ECHO experts in
the field, and notes the rapidity with which it disburses funds, especially in
the emergency phase[28].

Helping victims of the Earthquake in Haiti

In January 2010 a major earthquake struck Haiti's
capital, Port-au Prince, and its surrounding area killing 230.000 and
displacing 2 million of the 9.8 million population. With much of the government
infrastructure in disarray or destroyed, the EU's response in the provision of
shelter, food, water/sanitation/hygiene and healthcare was quick and amounted
to €339 million in total, of which €122 million from the Commission which was
channelled through the UN, Red Cross and European NGOs.

In addition, the EU civil protection mechanism
ensured a coordinated response by Member States' civil protection teams. With
the onset of the cholera epidemic in October 2010, the EU civil protection
mechanism was again activated to deploy experts on the ground, who worked
closely with epidemiologists from the European Centre for Disease Control and
monitored the deployment of water purification plants provided by one Member
State. Moreover, following assessments from ECHO's experts on the ground, the
Commission provided €10 million in emergency aid, focusing on medical
treatment, provision of clean water and sanitation facilities as well as
support to epidemiological surveillance and logistics.

Civil unrest in Libya

On 16 February 2011, civil unrest started in
Libya, quickly spreading across main cities and resulting in violent repression
by government forces. Within the following week, the Commission's Department
for Humanitarian Aid and Civil Protection (ECHO) had mobilized its Monitoring
and Information Centre (MIC) to assist in the evacuation of 5,800 EU citizens
from Libya by identifying, facilitating and co-financing additional transport
assets for evacuation. In the same week, it dispatched the first ECHO
humanitarian teams to the Egyptian and Tunisian borders.

Until the end of May, the Commission had deployed
experts from 5 of its country offices to Tunisia, Egypt, Libya, Algeria and
Chad to permanently monitor the situation. On this basis, it took subsequent
financing decisions bringing the total financial aid to €70 million. This
includes €10 million in Commission co-financing and the deployment of two
Member State teams on the ground coordinated by the MIC in order to ensure
effective use of Member State assets in the effort to repatriate third country
nationals from Libya's borders. In this way, 157 flights and 5 vessels were put
at the disposal of the International Organization for Migration to repatriate
third country nationals. Overall, Commission financing and coordination through
the MIC ensured the repatriation of 57,000 people to their country of origin,
made possible some of the first relief supplies shipped to Misrata, the
evacuation of people from the town as well as urgent medical, food and water
supply assistance in Misrata and other conflict zones.

The European Commission was the first
international humanitarian donor with a continuous presence inside Libya. Until
the arrival of the United Nations on 9 April, the Commission's humanitarian
experts in Benghazi coordinated the international humanitarian aid effort in
eastern Libya. Between mid-February and the end of May, the Commission issued
40 situation reports to EU Member States and the international humanitarian
community. It has also spearheaded – through meetings in the field, in Brussels
and teleconferences – the effort to provide continuous and effective
coordination of the European humanitarian assistance effort in Libya.

Earthquake and tsunami in Japan

A devastating earthquake and tsunami hit Northern
Japan on 11 March 2011, leading to thousands of deaths and the displacement of
hundreds of thousands of people. The Japanese
authorities addressed a request for assistance to the EU a few days after the
disaster, highlighting their wish that the European response be coordinated and
self-sufficient so as not to place further strain on Japan's badly-hit
infrastructure. The EU Civil Protection Mechanism was immediately activated. A
large number of EU Member States offered assistance through the Mechanism,
including items such as blankets, mattresses, tents, jerry cans, sleeping bags,
beds, food, water, clothing, special gloves, protective suits and masks, as
well as dose rate devices. An EU Civil Protection Team, composed of experts
from seven Member States and the Commission, was deployed on 19 March, and,
working hand-in-hand with the EU Delegation in Tokyo, set about identifying
areas where the EU's assistance could be used most effectively. In total, five
European relief flights (most of them offered free of charge by European
companies) were then arranged by the Commission's Monitoring and Information
Centre (MIC), transporting some 350 tons of assistance from different Member
States, with the European Civil Protection Team and the EU Delegation in Tokyo
arranging the delivery of the assistance on the ground. The EU also
subsequently allocated € 10 m in humanitarian assistance to provide support to
displaced people through the Red Cross.

Monsoon floods in Pakistan

Over the course of the 2010 monsoon season,
Pakistan experienced the worst floods in living memory. They affected 18
million people in 84 out of a total of 121 districts ranging over thousands of
kilometres and covering an area the size of England. The first flash floods, on
22 July, were provoked by heavy rainfall in the North where the population was still
suffering the consequences of an internal conflict that had triggered the
displacement of almost 3 million people in 2009.

The Commission responded with a first funding
decision of €30 million on 30 July to cover the conflict and flood affected
population in the North. Immediate deployment of experts to Islamabad was
organised in order to carry out needs assessments and to advice the Commission and
Member States on priority needs and response. At the peak of the crisis in
August, up to 14 expatriate staff from 7 different ECHO offices were present in
Pakistan. Within two months, 24 field assessment missions took place in all the
affected provinces. The first ECHO situation report was issued on 3 August,
followed by additional reports until the end of November, providing the
European Union (Council, Member States, European Parliament, services of the
Commission) with consolidated information on the urgent needs and priorities. On
the basis of these reports, additional financing decisions were taken, bringing
the total contribution from the EU budget to €150 million. This contribution
represented 35 % of the overall European Union humanitarian assistance (423
M€), with the UK being the other largest EU donor (35% also).

The Commission's civil protection Monitoring and
Information Centre (MIC) was also activated rapidly and deployed a team to
Pakistan in August. Thanks to the MIC, in-kind contributions of 18 Member
States could be coordinated, ensuring that goods arriving in Pakistan could be
processed quickly. The MIC also co-financed 11 flights to Pakistan out of the
14 flights which were part of the EU air bridge managed by the MIC, with an
important contribution from the Movement Planning Cell of the EU Military Staff.

16.
european added value in managing external borders, migration
and asylum

The challenges posed by migration and asylum
can no longer be met adequately by national administrations alone. The
abolition of internal border controls must be accompanied by common measures for
the effective control and surveillance of the Union’s external borders.
Improved operational cooperation involving the pooling of resources in areas
like training and equipment will ensure a more efficient use of public funds.
In addition, integrated management of our external borders is the only way to
achieve a fair burden-sharing between Member States, some of whom face the
heavy burden of long frontiers or surges in migration. A degree of
burden-sharing will reinforce solidarity between them and bring overall value
for money benefits through a more credible and fairer policy. In order to be
effective internal policies on immigration and asylum need to be accompanied by
cooperation mechanisms with third countries.

Migration and asylum has become an important
aspect of EU cooperation with third countries, through the EU's "Global
Approach to Migration", which encompasses not only the prevention and
management of irregular migration, but also measures to manage labour
migration, protect migrant's rights, combat trafficking and smuggling. the
"Global Approach to Migration" is implemented through structures
establishing political dialogue and cooperation, such as Mobility Partnerships,
Migration Profiles, Regional Protection Programmes, Migration Missions and
Cooperation platforms, complemented by a predictable framework for technical
and financial assistance.

Annex 1

European added value and Impact
Assessment

The Commission Impact Assessment process
prepares evidence for political decision-makers on the advantages and
disadvantages of possible policy options by assessing their potential impact.
In so doing, the process also deals with the issue of the added value of
Commission proposals. The current Impact Assessment Guidelines, in particular,
present the European added value test in the context of the subsidiarity check
with a set of questions to guide the assessment of the latter.

When doing an impact assessment, Commission
services must answer in particular the following questions which are directly
relevant for measuring EU added value:

·
Would actions by Member States alone, or the
lack of Community action "significantly" damage the interests of
Member States? (e.g. action restricting the free circulation of goods)

·
Would actions at Community level produce clear
benefits compared with action at the level of Member States by reason of its
scale?

·
Would actions at Community level produce clear
benefits compared with action at the level of Member States by reason of its
effectiveness?

In its examination, the Impact Assessment
Board[29]
typically plays a close attention to the justification for the proposed EU
action, and therefore, the added value of the EU action.

Statistics for 2010 show that subsidiarity
issues have been raised in 43% of all opinions (23 cases out of 54) and in 38%
of all resubmission requests (9 out of 24).

Extract
from the Impact Assessment Board 2010 report

The
Board pays close attention to how subsidiarity and value added are handled in
IA reports. It commented on 'subsidiarity and proportionality' in half of its
2010 opinions on first submissions, far more than previously. It aims to ensure
services produce a well-substantiated case for EU action, fit for scrutiny by
national Parliaments. The Board believes that a robust and evidence-based
justification for EU action and assessment of its 'value added' should be given
in all IA reports. Where relevant, reports should clearly explain why a
preferred option of EU intervention can achieve better results than Member
State action.[30]

In his letter of 26 November 2010 to the
European Parliament and the Council, the President of the Commission undertook
to:

–
Identify European added value as part of the
Commission's impact assessment of new legislative proposals having budgetary
impact;

–
Fully take into account European added value as
well as synergies between the EU and national budgets for specific policies,
and possible savings, in its proposals to the next Multiannual Financial
Framework, including the legal bases for multiannual expenditures programmes.

Accordingly, impact assessment reports are
being prepared for all legislative policy proposals composing the next MFF. In
its analysis of these reports, the Impact Assessment Board will look for
adequate indication of European added value of any proposed expenditure
programme as well as an analysis of the conditions under which it would be
maximised.

In order to do so, the Board analysis will
be guided by the following questions:

·
What are the general and specific objectives of
the expenditure programme? How do they relate to the fundamental goals of the
EU and/or the objectives of Europe 2020?

·
Why are public expenditures required to achieve
these objectives (as opposed, for instance, to simply a regulatory initiative?)

·
Why are expenditures financed from the EU budget
required to achieve these objectives?

Answering
the latter question requires looking further:

·
Why Member State expenditures alone would not be
sufficient? Would they fail to achieve the sufficient scale (economies of
scales)? Would they fail to take into account negative or positive
externalities between Member States (insufficient provision of EU public good)?
Would they risk overlaps/duplication of efforts (coordination
failures/economies of scales)?

·
Why would expenditures financed from the EU
budget be needed?

The EU
budget should add European added value by maximising the effectiveness and
efficiencies with which all public expenditures in EU support the achievement
of common EU goals and not simply to add a (thin) layer of expenditures on top
of those already financed directly by Member States. The following questions
aim at clarifying how this should be done.

·
Would expenditures financed by the EU budget be
used for the production of "pure" EU public goods (EU solidarity, EU
administrative expenditures)?

·
Would they solve specific problems identified
with exclusive Member States spending? If so, how?

·
Would they play a catalytic role?

·
Would they have synergy effects (with national
budgets and across EU policies)?

·
Why would expenditures financed from the EU
budget be sufficient?

EU
expenditure may be a good idea in theory but the limited size of the budget
and/or known inefficiencies may suggest caution. The following questions aim at
assessing how much caution would be called for.

·
Would expenditures financed by the EU budget be
proportionate to the objectives (critical mass and assessment of costs)?

·
Why would they be sufficient in reaching the
objectives?

·
Have existing evaluations shown the proposed programme
(or similar ones) to be so?

·
What are the risks/costs of the longer delivery
chain implied by EU expenditures?

·
Why would expenditures financed from the EU
budget be advisable?

Appropriate
answers to all of the above would already make a very strong case for the EU
action. However, experience shows that further factors should also be taken
into consideration, notably:

·
What are the risks of EU-expenditures creating
more distortions than national ones?

·
What are the risks of EU-expenditures crowding
out national ones (be they private or public)?

·
What are the risks of EU-expenditures
duplicating national ones?

·
Is centralisation at the level of the EU budget
proposed for an area where there is a significant heterogeneity of preferences
across Member States?

·
Is centralisation at the level of the EU budget
proposed for an area where there is resistance towards moving from national to
EU level accountability?

·
How do the benefits of the programme compare to
the costs of centralisation? How would the programme minimize costs?

Annex 2

European added value and evaluation

The question of EU added value is also
addressed by Commission services in ex ante evaluations. The Implementing rules
of the Financial Regulation (article 21), specifies the scope of ex ante evaluation
in the Commission by stating that:

"All proposals for programmes or
activities occasioning budget expenditure shall be the subject of an ex ante
evaluation, which shall address:

(a) the need to be met in the short or long
term;

(b) the added value of Community
involvement; ….."

In the context of ex post
evaluations, the following general questions serve as a basis for addressing
the European added value:

·
What impact has been achieved that would not
have happen without EU spending? What is the scale of the impact? Who has
benefitted most and how?

·
Have the objectives been better achieved because
the intervention took place at the EU level?

·
Has a given effect been achieved due to a
particular European added value factor such as critical mass, economies of
scale, synergy, catalyst, enlarged competition etc.?

·
Has a given effect been achieved at a lower cost
for taxpayers because the intervention took place at EU level?

·
Were the objectives more relevant because the
intervention was designed at the EU level?

·
Has the issue been addressed in a more coherent
way because it was addressed at the EU level?

[1]               2011 budget, PA payment appropriations.

[2]               COM(2010)700 final

[3]               European Parliament resolution on building our common
future: policy challenges and budgetary means of the enlarged Union 2007-2013 –
OJ, C104 of 30 April 2004, p. 991.

[4]               Council progress report on financial perspectives
2007-2013 : Doc. 16105/04

[5]               COM(2004)487

[6]               Kuhlmann and Edler, 2003

[7]               Fahrenkrog, 2002; Georghiou 2001; Georghiou et al.,
2002; PREST et al., 2002

[8]               G. Cipriani: Rethinking the EU budget. CEPS, 2007

[9]               http://erc.europa.eu/

[10]             As a result, for each euro the EU invests in the more
developed regions more than 9 euro are invested in the less developed ones.

[11]             The 2007-2013 programmes were designed to support the
delivery of the Lisbon and Gothenburg priorities in all regions of the EU,
supported by a process of setting targets for the share of resources to be
"earmarked" for these priorities.

[12]             Applica sprl & Ismeri Europe, Expert Evaluation
Network delivering Policy Analysis on the Performance of Cohesion Policy
2007-2013, Country Reports (forthcoming)

[13]             Mario Monti, "A New Strategy for the Single
Market", Report to the President of the European Commission, 9 May 2010

[14]             Quest – see footnote 16.

[15]             Instytut Badan Strukturnalnych, Assessment of the
benefits drawn by EU15 countries as a result of Cohesion Policy Implementation
in Poland (2009)

[16]             Bradley & Untiedt, Analysis of Cohesion Policy
2000-2006 using the Cohesion System of Hermin Models (November 2009); and Varga
and in't Veld, A model based analysis of the impact of Cohesion Policy
Expenditure 2000-2006 using the QUEST III endogenous R&D model (October
2009); both documents forming Work Package 3 of the ex post evaluation of
2000-2006.

[17]             Busillo, Muccigrosso, Pellegrini, Tarola, Terribile:
"Measuring the Effects of European Regional Policy on Economic Growth: a
Regression Discontinuity Approach" (2010)

[18]             Gefra & IAB, Work Package 6c: Enterprise Support –
an exploratory study using counterfactual methods on available data in Germany
(July 2010)

[19]             This happened in the context of an increase in
employment in the EU27 of 13.8 million over the period 2000-2007. However, it
should be noted that the 1 million figure represents jobs reported created in
supported firms and does not take account of displacement or substitution
effects. In addition, not all Member States or regions reported against this
indicator.

[20]             The data presented in this section comes from the ESF
ex-post evaluation as well as 2009 data from MS provided in annual
implementation reports.

[21]             OJ L 48, 22.2.2008, p. 82

[22]             OJ L 167, 29.6.2009, p. 26

[23]             Belgium, Czech republic, Denmark, Germany, Estonia,
Ireland, Spain, France, Lithuania, Luxemburg, Netherlands, Austria Poland,
Finland, Sweden, United Kingdom.

[24]             http://ec.europa.eu/food/animal/diseases/laboratories/index\_en.htm#list

[25]             thanks to the VAT
Information Exchange system (VIES)

[26]             EMCS (Electronic Movement Control System)

[27]             Under United Nations Security Council Resolution
1244/1999

[28]             The UK multilateral aid review notes that ECHO "is
the second biggest humanitarian donor in the world. Its comparative advantage
is its huge field presence across the world and in most fragile states, and its
size, including the ability to release up to €3m in the 72 hours following an
emergency. This makes it a significant contributor to humanitarian outcomes and
allows it to focus on ‘forgotten crises’, filling a gap in the system and
supporting a more consistent approach to funding according to need. In 2009,
ECHO funded relief for approximately 150 million beneficiaries in more than 70
countries." (DFID, Multilateral Aid Review, March 2011)

[29]             More information on the role of the Impact Assessment
Board as well as on the opinions delivered are available at the following web
address: http://ec.europa.eu/governance/impact/iab/iab\_en.htm

[30]             SEC(2011)126 final: Commission staff working paper:
Impact Assessment Board report for 2010.

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