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 Article by Filiz Hyusmenova published by New Europe newspaper on March 5, 2008
Where does the EU Cohesion Policy come from and where does it lead to?
Cohesion as a goal, approach and
tool for a better standard of living
For every fiscal period, the European Union sets concrete priorities and envisages how, through what funds and instruments they will be implemented. Naturally, these priorities are subordinated to the major common goals defined in the EU Treaty, and it is important to coordinate European and national policies. In this way the European community is acting in a concerted way and it is clear what funds to use and how to use them so that they can contribute to the goals and priorities defined.
For the 2007—2013 the EU has set three major goals:
*convergence
*regional competitiveness and employment
*territorial cooperation.
The first goal assists the growth conditions and the factors boosting economic indicators in least developed member states and regions. The so called Cohesion Fund is designated for achieving this goal.
The Cohesion Fund has become operative in 1993, after the Treaty of Maastricht. The Fund makes it possible for less developed member states to form an economic and monetary union with developed countries. Essential aspect is the budget discipline imposed by the Fund while encouraging the efforts for development and cohesion with richer states. The Cohesion Fund is a form of compensating poorer Community members so that they can unconditionally accept the principles of the economic and monetary union and the budget deficit control.
The EU countries can use the Cohesion Fund provided that their gross national product (GNP) does not exceed 90% of the community’s average.
Experience and Prospects
Over the 1994—1999 period, the Fund worked in four states – Greece, Spain, Ireland, and Portugal. It funded mainly transport infrastructure projects assisting the development of trans-European networks and environmental protection projects. They pertain to the EU environmental policy. The basic regulations of the Cohesion Fund dated 1994 was abolished on January 1 2007. New rules have already been established and they will be valid until 2013 when the actualization of European goals and the development of the Community will lead to new priorities in fund utilization. The regulations are binding and directly applied in all member states.
The Council Regulation (EC) No 1084/2006 of 11 July 2006 establishing a Cohesion Fund and repealing Regulation (EC) No 1164/94 reflects the reform put forward in the Third Cohesion Report of the European Commission in 2004. It maintains fundamental political principles such as long-term programming, partnership, assessment, joint management, etc. The smooth reform in financing simplified the performance system and balanced between the increased strategic component and ways of consumption. This simplification has made the programming process easier, elucidated the role of the Commission and the member states in the management, as well as in the control and adapted ways of implementation. At the same time, the areas in which the Fund is involved have been expanded, which is an inevitable result of the accession of the 10 new states on May 1 2004.
The Cohesion Fund can finance activities in support of sustainable development as long as they have clearly defined environmental aspects. This applies to fields such as power effectiveness or power generation from reusable sources. Besides trans-European transport networks, also funded can be railway, controllable sea and river waterways, multi-direction transport activities and their relations, environmental-friendly urban and public transportation, and control of roads and traffic in highly urbanized areas.
Debates
More than once has the European Parliament discussed on the end result of the 2007 EU cohesion policy. To what extent did it manage to bridge the development gap between European countries? What are the results of its implementation in the 10 states that joined the EU in 2004? What is the expected effect of the EU cohesion policy on Bulgaria and Romania? These questions were discussed during the debated on several reports in the late 2007 and are again on the agenda after the February session when the European Parliament adopted the Fourth Cohesion Report. Many statements were made during the vote on the initiating report of Polish socialist Lidia Joanna Geringer de Oedenberg entitled “The Role and Effectiveness of Cohesion Policy in Diminishing the Differences in the Development of the Poorest Regions of the EU,” and during the vote on the report of the Spanish PES MEP Francisca Pleguezuelos Aguilar on “The Impact of Structure Policies and Their Consequences for Cohesion in the EU.”
According to the reporters, it will be naïve to think that poorest regions would reach the level of development of the richest areas. What is important is for the European Union to encourage the bridging of this gap. The 2006 statistical data published by Eurostat point out that there are big differences in the development of the richest and the poorest regions. The reports emphasize that European cohesion policy must identify the needs of the poorest regions and find adequate mechanisms to assist their development. A fact worth noting is that some regions have difficulties in utilizing the funds allotted to them.
 Conclusions
In their conclusions, reporters point out that the structure funds management needs coordination at various levels (political, technical, and administrative) and of partnership among different participants (on a regional, national, and European level). The skills of administrative personnel in a number of countries need improvement. Funds must reach the respective regions quickly enough. The three regulations levels – community rules, national frameworks, and regional practices – should be procedurally simplified. And last but not least, the members of the European Parliament note that achieving social cohesion demands more efforts so that the best possible integration of physically disadvantaged people can be made. A most urgent trend in the EU cohesion policy emphasizes the equal opportunities for men and women on the labor market.
Results
At the end of January 2008, the European Commissioner on Regional Policy Danuta Hubner marked with “excellent” the fulfillment of the 2007 cohesion policy budget. She noted the record performance of member countries which made payments to the tune of 41 billion Euro. The new member countries were already approaching the utilization levels of the 15 “old” EU countries, Hubner commented. The next generation of programs for 2007—2013 has already been adopted and, according to the European Commission, this is an example of the speediest drafting of cohesion programs in the EU so far.
The ten new members have utilized an average of about 75% of the funds allocated, the highest percentage scored by Hungary – 82%, and the lowest by Cyprus – 62%. For older member countries the average percentage is 84, with Greece utilizing 73% of cohesion funds, and Sweden 94%.
A quicker growth and rates of catching up with the cop countries is observed among the new member states, especially those with low gross domestic product per capita. In the three Baltic states, for instance, the per capita gross domestic product has nearly doubled between 1995 and 2005. Poland, Hungary and Slovakia have also scored good results, with growth rates over twice the EU average. These data give grounds for optimism regarding the positive impact of the cohesion policy on Bulgaria’s development.
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