New Budget, New Regulations, New Strategies: The Reform of EU Cohesion Policy EoRPA Paper 06/3 John Bachtler, Fiona Wishlade and Carlos Méndez This paper has been prepared for the 27th meeting of the EoRPA Regional Policy Research Consortium at Ross Priory, Loch Lomondside on 8-10 October 2006. It should not be quoted without permission. European Policies Research Centre University of Strathclyde 40 George Street Glasgow G1 1QE United Kingdom Tel: +44-141-548-3339/3061/3334 Fax: +44-141-548-4898 e-mail:[email protected] [email protected] [email protected] New Budget, New Regulations, New Strategies: The Reform of EU Cohesion Policy Preface This paper on the reform of EU Cohesion policy provides a review and assessment of the EU budget agreement and the strategic planning undertaken by Member States for the 2007- 2013 period. The paper has been prepared by the European Policies Research Centre (EPRC) under the aegis of EoRPA (European Regional Policy Research Consortium), which is a grouping of national government authorities from countries across Europe. The Consortium provides sponsorship for the EPRC to undertake regular monitoring and comparative analysis of the regional policies of European countries and the inter-relationships with EU Cohesion and Competition policies. EoRPA members currently comprise the following partners: Austria • Bundeskanzleramt (Federal Chancellery), Vienna Finland • Sisäasiainministeriö (Ministry of the Interior), Helsinki France • Délégation interministérielle à l'aménagement et à la compétitivité des territoires (DIACT), Paris Germany • Bundesministerium für Wirtschaft und Arbeit (Federal Ministry of Economics and Labour), Berlin • Ministerium für Wirtschaft, Technologie und Arbeit, Freistaat Thüringen, Erfurt Italy • Ministero dello Sviluppo Economico (Ministry of Economic Development), Dipartimento per le Politiche di Sviluppo e Coesione (Department for Cohesion and Development Policies), Rome Netherlands • Ministerie van Economische Zaken (Ministry of Economic Affairs), The Hague Norway • Kommunal-Og Regionaldepartementet (Ministry of Local Government and Regional Development), Oslo Poland • Ministerstwo Rozwojce Regionalnego (Ministry of Regional Development), Warsaw Sweden • Näringsdepartementet (Ministry of Industry, Employment and Communications), Stockholm United Kingdom • Department of Trade and Industry, London • Scottish Executive Enterprise, Transport & Lifelong Learning Department, Glasgow The research for this paper was undertaken by EPRC in consultation with EoRPA partners. It involved a programme of desk research and fieldwork visits among national and regional authorities in sponsoring countries during Spring/Summer 2006. EoRPA Paper 06/3 i European Policies Research Centre New Budget, New Regulations, New Strategies: The Reform of EU Cohesion Policy The paper has been drafted by Professor John Bachtler, Fiona Wishlade and Carlos Méndez. It draws on country-specific research contributed by the following research team: • Dr Sara Davies (Germany) • Laura Polverari (Italy) • Dr Martin Ferry & Rona Michie (United • Professor George Petrakos and Kingdom) Yannis Pycharis(Greece) • Frederike Gross (Belgium, France, • Heidi Vironen (Finland, Sweden) Luxembourg) • Tobias Gross (Austria) • Carlos Méndez (Portugal, Spain) • Professor Henrik Halkier (Denmark) • Professor Douglas Yuill (Norway, Netherlands) • Dr Irene McMaster (Ireland) Many thanks to everyone who participated in the research. The European Policies Research Centre also gratefully acknowledges the financial support provided by Sponsors of the EoRPA Consortium. Disclaimer It should be noted that the content and conclusions of this paper do not necessarily represent the views of individual members of the EoRPA Consortium. EoRPA Paper 06/3 ii European Policies Research Centre New Budget, New Regulations, New Strategies: The Reform of EU Cohesion Policy New Budget, New Regulations, New Strategies: The Reform of EU Cohesion Policy EXECUTIVE SUMMARY....................................................................................V 1. INTRODUCTION .................................................................................... 1 2. THE FINANCIAL FRAMEWORK NEGOTIATIONS ............................................... 3 2.1 First UK Negotiating Box ...................................................................... 3 2.2 Second UK Negotiating Box ................................................................... 4 2.3 Brussels European Council, December 2005 ............................................... 5 2.4 Inter-Institutional Agreement, April 2006 .................................................. 7 2.5 Assessment of the financial framework..................................................... 9 2.5.1 Reflections on the negotiations........................................................... 9 2.5.2 Member State reactions to the outcome ...............................................11 3. THE IMPLICATIONS FOR COHESION POLICY – ELIGIBILTY................................ 13 3.1 The new architecture of the Funds.........................................................13 3.2 Convergence objective .......................................................................13 3.2.1 Convergence regions .......................................................................13 3.2.2 Phasing-out regions ........................................................................15 3.2.3 Cohesion countries .........................................................................16 3.3 Regional Competitiveness & Employment objective.....................................17 3.3.1 Phasing-in regions ..........................................................................17 3.3.2 Regional Competitiveness & Employment regions ....................................18 3.4 Territorial cooperation objective...........................................................19 3.5 Impact of the reform on eligibility .........................................................19 4. THE IMPLICATIONS FOR COHESION POLICY - FINANCIAL ALLOCATIONS TO MEMBER STATES............................................................................................ 23 4.1 Allocation mechanisms .......................................................................24 4.1.1 Convergence objective ....................................................................25 4.1.2 Regional Competitiveness & Employment objective .................................26 4.1.3 Territorial Cooperation objective .......................................................26 4.1.4 Absorption cap ..............................................................................27 4.1.5 Additional provisions ......................................................................29 4.2 Financial outcomes ...........................................................................29 4.3 Comparisons between 2000-06 (2004-06) and 2007-2013...............................36 5. THE IMPLICATIONS FOR COHESION POLICY – THE REGIONAL ALLOCATION OF FUNDING.......................................................................................... 39 5.1 Regional allocations...........................................................................39 5.2 Austria ..........................................................................................40 5.3 Finland ..........................................................................................41 5.4 France...........................................................................................42 5.5 Germany ........................................................................................43 5.6 Italy..............................................................................................45 5.7 Netherlands ....................................................................................45 5.8 Poland...........................................................................................46 EoRPA Paper 06/3 iii European Policies Research Centre New Budget, New Regulations, New Strategies: The Reform of EU Cohesion Policy 5.9 Sweden..........................................................................................48 5.10 United Kingdom................................................................................49 6. THE NEW REGULATIONS ....................................................................... 51 6.1 Objectives and general rules on assistance (Title I).....................................51 6.2 Strategic approach to cohesion (Title II) ..................................................53 6.3 Programming (Title III) .......................................................................54 6.4 Effectiveness (Title IV) .......................................................................55 6.5 Financial contribution by the Funds (Title V).............................................56 6.6 Management, monitoring and controls (Title VI).........................................57 6.7 Financial management (Title VII)...........................................................58 7. STRATEGIC PLANNING FOR THE 2007-13 PERIOD ........................................ 61 7.1 National Strategic Reference Frameworks ................................................61 7.1.1 Preparation of the NSRFs .................................................................61 7.2 Strategic priorities in EoRPA Member States..............................................65 7.2.1 Strategic priorities: overview ............................................................65