A Regional Development Committee of the European Parliament has – after more than a year of negotiations with the Commission and EU ministers – finally agreed on a deal on the EU’s cohesion policy for 2014-2020. This has paved the way for the €325 billion investment tool for poorer regions across the European Union to come into force before the end of the year. ‘Cohesion policy’, often also referred to as ‘regional policy’, is the EU’s main common investment policy tool that provides vital basic financial support for investing in regions of the EU, thus helping to create jobs and boost economic growth.
The regional development committee endorsed on Thursday (7 November) the deal struck with EU member states on the reform of key regulations covering all EU funds that in turn clears the last hurdle before the deal goes to the entire Parliament for a vote. As MEP Danuta Hübner (EPP, Poland), chair of the regional development committee, explained, “[these] funds deliver major investment in times of the economic crisis.” The cohesion policy accounts for a substantial share – about a third – of the EU budget: it was €347 billion for the 2007-2013 period, or almost €50 billion per year. For the 2014-2020 period, the EU member states have reduced this budget to just over €325 billion. Cohesion policy’s ultimate aim is to reduce disparities between the levels of development of the various regions and the backwardness of the least-favored regions, including rural areas.
The former EU regional policy commissioner added that the EU institutions had been able to agree to a reform of EU regional policy that focused investment on key areas for growth. With 72.5 billion euros, Poland is by far the biggest recipient of cohesion funds, followed by Italy that will receive 29.2 billion euros. Quite logically, less developed regions are priority recipients of cohesion funds. Almost the entire territory of Poland and the southern regions of Italy are considered less developed regions. The entire territories of Bulgaria, Croatia, Estonia, Latvia, Lithuania, Portugal, as well as the majority of the territories of the Czech Republic, Hungary, Romania, Slovakia, Hungary and Greece are considered less developed regions.
The reformed cohesion policy introduces three new elements to make it more effective and ensure that they will lead towards clear results. Firstly, priority is given to funding of projects focusing on research and development, innovation, SME support, energy efficiency and renewable energies, poverty reduction, the fight against unemployment and job creation. Secondly, EU member states will have to clearly identify what objectives they want to achieve with the available funding and they will have to explain exactly how to measure progress towards those aims. The third key element is that the EU plans to introduce for the first time conditions that member countries and regions must meet before they receive the funds. The mechanism can trigger the suspension of funds in the event of a adverse macroeconomic conditions or a soaring budget deficit.
