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DIGITALEUROPE Appreciates the Opportunity to Share Below Its Comments on the Future of Cohesion Policy As Per the Questionnaire Kindly Prepared by the Commission

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DIGITALEUROPE Appreciates the Opportunity to Share Below Its Comments on the Future of Cohesion Policy As Per the Questionnaire Kindly Prepared by the Commission THE FUTURE OF COHESION POLICY DIGITALEUROPE appreciates the opportunity to share below its comments on the future of cohesion policy as per the questionnaire kindly prepared by the Commission. o How could the Europe 2020 Strategy and cohesion policy be brought closer together at EU, national and sub-national levels? The basic precondition for effectiveness of any policy intervention is that they are based on and fit the economic and societal context. What is the context for the Cohesion Policy today? We live in times when Europe has experienced its worst recession since the 1930s. Countries face public budgets challenges and fragile recovery without accompanying employment gains. There is profound societal transformation going on across the globe. Advances in ever more capable network-based technologies are reshaping the way we do business, spend our free time, communicate, socialise, work and collaborate. A new economic and employment landscape is emerging and the transition period needs to be actively managed. Furthermore, long-term challenges of scarcity of resource, environmental degradation, an ageing population, rising health costs and the financial viability of existing public services models are compounded by security and energy threats. As EU 2020 states: either the EU faces up to the immediate and long-term challenges and regains competitiveness, boosts productivity and assures its long term prosperity, or it will have to address permanent lower levels of wealth, sluggish growth, high levels of unemployment, social distress, and a diminished role in world affairs. As explained above, the landscape of the cohesion has changed and the Cohesion Policy must adequately reflect new reality through a much closer alignment with the longer term growth and competitiveness agenda. Therefore to align it better with EU 2020 at all levels, new framework for cohesion policy should ensure that: National-level policies re-orient cohesion policies frameworks toward delivering the more tangible and growth-related objectives. Cohesion Policy ensures that it maximizes the extent to which specific initiatives, which are its part, fully leverage technological advances Cohesion policy takes account of the key trends that impact and affect its effectiveness. These are trends relating to technological advancements and the pervasiveness of ICT in society, demographic trends, and the increasingly urban nature of the country. Cohesion Policy ensures protection and enhancement of the open communications networks and expression and communications within the context of the new economy. Job creation in changed environment is a core objective not only economically, but also socially, as it is having a direct impact on Cohesion Policy objectives. The challenge of job creation must be addressed by fostering more open, transparent and competitive markets DIGITALEUROPE Rue Joseph II, 20 >> B-1000 Brussels [Belgium] T. +32 2 609 53 10 >> F. +32 2 609 53 39 www.digitaleurope.org >> 1 of 6 and facilitating access for European firms to global markets and foreign investors to the EU (which is in accordance with EU2020 strategy). Cohesion Policy should be simultaneously aligned with the realities of the changing nature of unemployment. The European Social Fund must play a decisive role in such an alignment. o Should the scope of the development and investment partnership contract go beyond cohesion policy and, if so, what should it be? The Commission proposal to ensure better alignment with Europe 2020 and linkage to „concrete investment priorities accompanied by clear and measurable targets‟ is welcomed. Member States must be given a greater role and responsibility in addressing competitiveness and productivity lags within their own nation. Cohesion Policy should not be seen as a perpetual or permanent subsidy that rewards slow growth and failure to invest wisely. Regions must plan in advance for the withdrawal of Cohesion Funds and submit development and partnership plans that reflect this reality. The investment partnership contract is a key tool to be used to drive attainment of economic and social objectives if adequate metrics and measurement is used in the 3-year reviews. The programme and its administration is not the objective in itself but economic growth, social inclusion and skilling of the population to enable them to deal effectively with economic and societal changes. These target outcomes needs to be reflected in the contract. Additionally, the same “development and investment partnership contract” could also be used as a reference to frame and prioritise a region‟s engagement in wider EU programmes such as the RTD framework. This holistic approach to key development objectives and would support industry, government, academic and SME identification with the targets defined in the contract It is also very important that the scope for “development and investment partnership contracts” helps to create environment that spurs innovation and growth. Therefore, contract should be accompanied by additional national-level incentives structures, such as more flexible tax incentives at the enterprise and individual levels should be supported to increase both the levels of private investment in growth and cohesion supporting systems. The role of the EU policy here should be to allow such flexibility at the national level and monitoring and communicating the benefits of specific policies deployed across various states. An aligned set of policies – fostered at the EU level and deployed to the member states levels – should aim to develop a functional, integrated, single market for public procurement across the EU. Once again, such a market can act as a focal point for enhancing territorial cohesion and delivering on the Europe 2020 objectives. A number of publicly-financed sectors across Europe – e.g. health, education, public transport etc – remain largely closed to inter-EU competition, with exception to the direct asset procurement and, less often, asset management. o How could stronger thematic concentration on the Europe 2020 priorities be achieved? Measures and interventions of Cohesion Policy should be aimed at support of the competitiveness, growth, innovations and development of infrastructure and services necessary for the digital/knowledge-based society. New ICT-enabled networks such as smart grids and ultra-fast broadband are the backbone for a networked society. Moreover, they will help drive the creation of a sustainable tax base built on skills, industry, science and innovation. Financial means should not be any more available for simple re-building/repair of physical infrastructure in individual Member States or non-systemic/ad hoc actions. Specifically, funding that is directed at a substantial improvement in the quality of services provided by Member States and that lead to an improvement in the management of infrastructure will have a more beneficial impact and help to achieve the priorities set out in Europe 2020. There should be thus thematic alignment with country‟s Digital Agendas. >> 2 of 6 o How could conditionalities, incentives and results-based management make cohesion policy more effective? Cohesion policy is an important tool through which to drive significant social and economic progress across member states and to achieve the EU 2020 objectives. In turn, the cohesion policy should make use of conditionality provisions and incentives to accelerate and entrench key policy reforms required to reach these objectives. However, it is necessary to bear in mind that conditionality can in certain pose certain risks too: some conditionality will be linked to major national reform policies (e.g. cutting budget deficit or implementation of pension reforms), but the investments in many cases will be carried out at local and regional levels. The risk is that local and regional stakeholders could be penalized for the failure of the national governments to comply with their reform plans. We believe that requirement for an effective performance management system should become an essential part of the cohesion policy guidelines. Such systems should employ clearly defined objectives, targets, baselines and milestones. On such a basis it would be able clearly identifiable which projects are hitting its targets and which are not. This would open the possibility of allocating resources towards more productive initiatives, while also helping to better understand and address troubled projects. Further, such a performance management system will enable the European Union Member States as well as individual stakeholders clearly articulate the benefits and returns on the investment it is making through the cohesion policy. o How could cohesion policy be made more results-oriented? Which priorities should be obligatory? Cohesion Policy must become one of enablers of economic and societal transformation and to address effectively the main challenges of EU society. Therefore, Cohesion Policy should be focused on interventions that can solve the most acute challenges of EU society e.g. productivity gaps, employment levels, an ageing population, high social and healthcare costs, innovation, competitiveness agenda and security threats. are financially sustainable and introduce innovative models to support lower cost of quality public services e.g. via adopting intelligent technologies such as business process revision and development of shared services and cloud technologies) and/or are enhance risk analytics capabilities at various levels
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