REPORT on the communication from the Commission ‘Second progress report on economic and social cohesion’: regional trends, debate on future developments
(COM(2003) 34 - 2003/2095(INI))

10 July 2003

Committee on Regional Policy, Transport and Tourism
Rapporteur: Emmanouil Mastorakis

PROCEDURAL PAGE

By letter of 30 January 2003, the Commission forwarded to Parliament its communication ‘Second progress report on economic and social cohesion’: regional trends, debate on future developments (COM(2003) 34) which had been referred to the Committee on Regional Policy, Transport and Tourism and to the Committee on Employment and Social Affairs and the Committee on Agriculture and Rural Development for information.

At the sitting of 15 May 2003 the President of Parliament announced that the Committee on Regional Policy, Transport and Tourism had been authorised to draw up an own-initiative report on the subject under Rules 47(2) and 163 and the Committee on Employment and Social Affairs and the Committee on Agriculture and Rural Development had been asked for their opinions.

The Committee on Regional Policy, Transport and Tourism had appointed Emmanouil Mastorakis rapporteur at its meeting of 19 March 2003.

It considered the draft report at its meetings of 12 June and 8 July 2003.

At the last meeting it adopted the motion for a resolution by 44 votes to 6, with 2 abstentions.

The following were present for the vote: Rijk van Dam, vice-chairman and acting chairman; Gilles Savary vice-chairman; Emmanouil Mastorakis, rapporteur; Sylviane H. Ainardi, Rolf Berend, Philip Charles Bradbourn, Felipe Camisón Asensio, Chantal Cauquil (for Helmuth Markov), Luigi Cesaro (for Dieter-Lebrecht Koch), Luigi Cocilovo, Jean-Maurice Dehousse (for Danielle Darras), Nirj Deva (for Sérgio Marques), Jan Dhaene, Den Dover (for Christine de Veyrac), Garrelt Duin, Alain Esclopé, Giovanni Claudio Fava, Jacqueline Foster, Mathieu J.H. Grosch, Catherine Guy-Quint (for Ewa Hedkvist Petersen), Konstantinos Hatzidakis, Roger Helmer (for Carlos Ripoll y Martínez de Bedoya), Juan de Dios Izquierdo Collado, Georg Jarzembowski, Giorgio Lisi, Nelly Maes, Erik Meijer, Rosa Miguélez Ramos, Bill Miller (for John Hume), Enrique Monsonís Domingo, Francesco Musotto, Camilo Nogueira Román, Josu Ortuondo Larrea, Peter Pex, Wilhelm Ernst Piecyk, Joaquim Piscarreta (for James Nicholson), Giovanni Pittella (for Brian Simpson), Samuli Pohjamo, Bernard Poignant, José Javier Pomés Ruiz, Reinhard Rack, Dana Rosemary Scallon, Ingo Schmitt, Renate Sommer, María Sornosa Martínez (for Ulrich Stockmann pursuant to Rule 153(2)), Dirk Sterckx, Joaquim Vairinhos, Ari Vatanen, Herman Vermeer, Luigi Vinci (for Emmanouil Bakopoulos pursuant to Rule 153(2)), Mark Francis Watts and Brigitte Wenzel-Perillo (for Margie Sudre).

The Committee on Employment and Social Affairs and the Committee on Agriculture and Rural Development decided respectively on 12 March 2003 and 20 May 2003 not to deliver an opinion.

The report was tabled on 10 July 2003.

MOTION FOR A EUROPEAN PARLIAMENT RESOLUTION

on the communication from the Commission ‘Second progress report on economic and social cohesion’: regional trends, debate on future developments

(COM(2003) 34 - 2003/2095(INI))

The European Parliament,

–   having regard to the Commission report (COM(2003) 34),

–   having regard to Rules 47(2) and 163 of its Rules of Procedure,

–   having regard to the report of the Committee on Regional Policy, Transport and Tourism (A5‑0267/2003),

A.   whereas regional and cohesion policy plays a central role in the process of European integration and in supporting the single market and economic and monetary union,

B.   whereas it is vital to stress the importance of this policy for boosting cohesion in an enlarged European Union which will experience a particular increase in disparities between levels of development in its various regions, and whereas the resources to be made available must match the new requirements,

C.   whereas the bridging of differences and the fostering of long-term, balanced and polycentric development throughout the European Union are of vital importance,

D.   whereas the guidelines decided on at the European Councils of Lisbon and Göteborg for competitiveness and sustainable development should continue to determine the priority objectives of the EU strategy in future decades,

E.   whereas it expects that before the end of 2003 specific conclusions will be drawn and proposals made by the Commission, in its third report on economic and social cohesion,

General remarks

1.   Notes the need for a more accurate setting of targets and priorities, in order to improve still further ways of dealing with inequalities and the results of cohesion policies in the enlarged Union;

2.   Endorses the Commission’s stance of rejecting attempts at the renationalisation of regional and cohesion policy, and welcomes its determination to maintain a genuine Community policy;

3.   Supports the Commission’s view on the application of EU regional and cohesion policy to all the regions of the EU which meet the relevant criteria;

4.   Considers that future regional policy, incorporating the ‘new’ economy and based on the knowledge economy, ought to take clear account of the guidelines and proposals included in the European spatial development perspective (ESDP, Potsdam, May 1999 – informal Council of ministers for regional policy and spatial planning);

5.   Insists on the urgent need for sectoral policies to make a greater contribution to the objective of cohesion and, in particular, those with a significant impact on the land, such as agriculture, fishing, transport, research and technology, education and training and information society policy;

6.   Reiterates the need for greater coordination between the above policies and regional and cohesion policy;

7.   Considers that special attention should be paid to achieving a proper balance and the best possible combination of the rural and urban dimensions of the development policy; whilst targeting unemployment blackspots wherever they occur;

8.   Stresses the need for a direct link between future regional policy and European competition policy, with particular reference to tax concessions and State aid in the regions;

9.   Expresses once again its conviction that the current threshold of 0.45% of Community GDP allocated to the cohesion policy is a threshold beneath which it is not possible to fall without jeopardising the achievement of the objectives laid down in the Union's cohesion policy and also believes that an evaluation of the needs of cohesion policy is necessary in the immediate future in the context of the financial perspectives with a view to enlargement;

Objective 1

10.   Emphasises the fact that the Commission ought to pay special attention to those regions suffering from the ‘statistical’ effects of enlargement, which lose their eligibility for Objective 1 as a result of the recalculation of EU GDP, by continuing to treat those regions as similar to Objective 1 areas with the equivalent level of support and administering aid in accordance with Article 87, paragraph 3(a);

11.   Calls for the Commission to pay special attention to cases where regions have naturally emerged from Objective 1 status by their own efforts but which also require adequate temporary financial support to consolidate their upward progress;

12.   Considers that, under Article 299(2) of the Treaty, special attention should be paid to the ultra-peripheral regions and sparsely populated areas on the basis of Article 2, Protocol 6 in the Accession treaty for Austria, Sweden and Finland;

13.   Stresses that the Commission should also pay special attention to the least favoured islands mentioned in Article 158;

14.   Recognises that political and economic priority must continue to be given to the Objective 1 regions;

15.   Accepts that the threshold of 75% of the average GDP in the EU Member States must remain the essential criterion for eligibility for Objective 1;

16.   Draws attention to the vital role played by the Cohesion Fund in projects to protect the environment and transport and stresses the importance of maintaining this fund, especially for the new Member States, ensuring in particular that the infrastructure financed by the Cohesion Fund in the beneficiary countries is not inconsistent with the priorities of the new policy of sustainable mobility set out in the White Paper on transport policy for 2010 and does not create distortion of competition between the Member States;

17.   Stresses the importance of the Cohesion Fund, particularly for the applicant countries, since those Member States which have a GDP of less than 90% of the EU average and are not members of the euro zone receive a combined grant from the Cohesion Fund and the Structural Fund for use in the environmental sector and for trans-European networks;

Objective 2

18.   Welcomes the Commission’s recognition of the importance of Objective 2 in promoting economic and social cohesion and reducing disparities in development levels between the regions of the enlarged Union;

19.   Supports the idea of a new Objective 2 to foster regional competitiveness, within the framework of balanced and sustainable polycentric development, in accordance with the Lisbon and Göteborg guidelines;

20.   Stresses that the future Objective 2 should, as hitherto, apply to territorial units with structural problems, to receive support in line with their development levels and the extent of their problems;

21.   Calls on the Commission to establish clear, objective Community criteria for determining the eligibility of Objective 2 regions, with a view to enabling thematic objectives (such as those set out in the Second progress report on economic social cohesion) to be achieved;

22.   Considers it imperative to act in the framework of coherent, global, regional economic development programmes and, as a matter of priority, on the main factors of regional competitiveness, namely accessibility - particularly in the case of rural, outlying, mountain and island areas, research and development, education and training and the information society;

23.   Considers that regional areas in which permanent geographical handicaps (island or mountain nature, low population density) hinder economic development, output and job creation and which are not eligible for other Structural Funds should be eligible for a reformed Objective 2 or for some other new specific Community initiative;

24.   Draws attention to the need for more clarification of the scope of activities within the various objectives and calls, specifically, for the measures and funding to be moved from Objective 3 to the new Objective 2;

25.   Insists on the need for an accurate definition of the relationship between regional policy and the rural development policy implemented within the framework of the second pillar of the CAP and the socio-economic aid available from the structural section of the FIFG;

26.   Backs the Commission in its regional approach to development, particularly the idea of a single programme and a single financial package per region;

27.   Emphasises the need for clear and unambiguous criteria for the implementation of Objective 2, in order to achieve a balanced distribution of economic resources between the regions in accordance with actual requirements;

Regional cooperation

28.   Stresses the need for consistency in the policy for regional cooperation in its three dimensions, namely cross-border (land or sea), trans-national and inter-regional;

29.   Calls on the Commission to foster regional cooperation further, using the best methods possible and the experience acquired from positive Community initiatives, and to simplify procedures;

30.   Calls on the Commission to submit proposals, on the basis of experience gained from INTERREG, to improve the operation of regional cooperation, where appropriate by facilitating the financing of investment in infrastructure and the implementation of certain cross-border infrastructure projects under the new instruments of Community regional policy;

31.   Recommends that innovative measures and pilot projects are maintained and strengthened after 2006;

Simplification

32.   Endorses the Commission’s main goal of simplifying the rules for implementing regional policy, particularly through increased consistency between targets and boosting the regional dimension in the implementation, management and planning of programmes and support measures; is in favour of the idea of a single fund approach per development objective;

33.   Reminds the Commission of its request for tripartite contracts between the Commission, Member State and the region;

34.   Calls on the Commission to divide powers and responsibilities clearly amongst all those involved in the cohesion policy;

35.   Considers that there should be much greater simplification of administrative procedures, particularly in respect of the bureaucracy surrounding the payments procedure (excessive checks in many instances, etc.);

36.   Stresses once again its conviction that it is both necessary and feasible to achieve a proper balance between simplification and scrutiny;

37.   Demands that in the framework of the revision of the structural funds regulations, the role of the partnership is strengthened; given the unequal progress in applying partnership in the Member States, considers that the Commission should propose an harmonisation of the implementation and selection of partnership in regional policy;

38.   Instructs its President to forward this resolution to the Council and Commission.

EXPLANATORY STATEMENT

Introduction

In keeping with and following on from previous communications[1], the Commission's second progress report on economic and social cohesion provides a valuable updated analysis of the current situation and trends surrounding regional disparities in both the existing and the future enlarged Union. However, the principal focus of the report is the debate on the future of Europe's cohesion policy itself. In this, it anticipates the proposals for the 2007-13 programming period that will be contained in the Third Report on Economic and Social Cohesion due at the end of the year.

Your rapporteur welcomes the Commission's approach to this debate and in particular the openness which it has displayed in the dialogue with other parties. The current communication accurately and succinctly describes the state of discussions and confirms the broad agreement which exists on the vital need for the policy to continue and develop at a European and regional level in the future.

General Remarks

The Commission's report indicates that in a climate of slowing economic growth, economic and social convergence has nevertheless continued with reduced disparities between the Member States of the present Union. However, within the Member States such disparities have persisted and deepened.

On the eve of enlargement, Europe's regional income disparities are about to increase dramatically. As the Commission points out, 48 regions accounting for 18% of the EU15 population, had a per capita income below 75% of the EU15 average. In an enlarged Union, a total of 67 regions will fall below the 75% threshold, representing 26% of total population.

In these circumstances, it is essential to foster long-term, balanced and polycentric development throughout the Community and to apply regional and cohesion policy to the whole territory of the Union, so as to make it relevant to all its citizens. In this regard, the strategies for competitiveness and sustainable development mapped out at the Lisbon and Göteborg summits should remain our guiding principles for the way forward.

The Future of Cohesion Policy

The European Parliament has already, in various opinions[2], affirmed its commitment to an inclusive Community cohesion policy and its complete rejection of any attempts at renationalisation. In particular, it has stressed its conviction in the need for a minimum of 0.45% of the Union's GDP to be devoted to financing such a policy. Your rapporteur is pleased to note that these crucial imperatives are not challenged in the Commission's report and that the Commission has recognised and confirmed the broad consensus which exists on the need for the policy to be concentrated in the least developed regions.

Objective 1

The continued concentration on Objective 1 regions and the maintenance of the eligibility criteria at 75% of Community GDP, will mean of course that there will be a readjustment in the allocation of resources in favour of the new Member States. This should be welcomed in a spirit of openness and solidarity. However, there must be a fair and equitable arrangement made for those regions which will suffer from the so-called "statistical" effects of enlargement, whereby they will lose their eligibility for Objective 1 as a result of the lowering of the average per capita GDP in the larger Union. According to the figures available to the Commission for 2000, this could affect up to 18 regions with a population of some 18 million people.

Your rapporteur is pleased that the report also takes note of the so-called "mechanical" effect, whereby regions no longer meet the eligibility criteria for Objective 1 by virtue of growth in their per capita income. The Commission must take account of these and other 'special cases', such as, in particular, the ultra-peripheral regions, when it comes to making its proposals in its third report.

Finally, the 75% of per capita GDP criterion for eligibility for Objective 1, while essentially fair, can sometimes prove itself to be a rather blunt instrument. The Commission should therefore investigate how additional criteria might be applied such as education and unemployment levels or peripherality and accessibility. Moreover, the Commission might usefully consider how to better integrate the Cohesion Fund into its overall approach to the least developed regions.

Objective 2

In the current report, unlike the first progress report which does not mention Objective 2, there is a welcome recognition by the Commission of the importance and relevance, to regions outside Objective 1, of Community efforts to tackle economic and social disparities. In particular, the report notes that initial positions in certain Member States in favour of renationalising such actions 'do not appear to have gained ground.'

Thus, in line with Parliament's previous positions[3], it again must be stressed that continued Community support to these regions is justified not only on account of the persistence of conversion and economic development issues, but because, as the Commission acknowledges, not all Member States and regions possess the same means for addressing their problems. It is essential therefore, to maintain an Objective 2 which fosters regional competitiveness within the Lisbon and Göteborg strategies.

In this context, it is necessary also to underline that cohesion must be a global objective and that support should be available to all regions. Nevertheless, in order not to overly dissipate resources, there must be a concentration on the main factors of regional competitiveness, such as accessibility, research and development, education and training and the information society. It will also be necessary to devote particular attention to regions which suffer from serious geographical or natural handicaps (island regions, mountain regions and sparsely populated regions).

In his draft resolution, your rapporteur has therefore reminded the Commission of these factors and called for greater clarification to the scope and implementation of the policy in these regions.

Enhanced Cooperation

Cooperation between regions is, as the Commission acknowledges, particularly important for European territorial integration and should be reinforced. Your rapporteur has called on the Commission to study the best means of achieving this.

In this respect, it should be remembered moreover that cooperation between regions has three dimensions:

-   "cross-border" or "transfrontier" cooperation between adjoining regions;

-   "trans-national" cooperation between groups of regions with a specific interest in common;

-   "inter-regional" cooperation between non-adjoining regions.

All three dimensions are important.

Simplification of Management and Implementation

One of the constant themes to run through the whole debate on the future of the Structural Funds has been the need for a greater simplification of administrative procedures. The broad consensus which exists on this is reflected in the Commission's report.

In this context, ideas such as single programmes per region and the single fund approach are to be welcomed. Moreover, it is vital to give more responsibility to the regions themselves in the management and implementation of programmes. The notion of tripartite contracts, between the Commission, Member State and the region, already called for by Parliament should be actively pursued.

Conclusion

The rapporteur believes that the Commission is on the right track and that it should continue to purse its open approach to the debate on the future of cohesion policy. He therefore looks forward confidently to the forthcoming proposals for the future.

• [1] Second Report on Economic and Social Cohesion, COM (2001) 24 final of 31 January 2001 and First Progress Report on Economic and Social Cohesion, COM (2002) 46 final of 30 January 2002.
• [2] Musotto Report on the second report of the Commission to the Council, the European Parliament, the Economic and Social Committee and the Committee of the Regions on economic and social cohesion, T5-0060/2002 of 07/02/2002, OJ C284 of 21 November 2002 and Schroedter Report on the first progress report from the Commission on economic and social cohesion, A5-0354/2002, T5-0535/2002 of 07/11/2002
• [3] Schroedter Report, op. cit.