REPORT on the role and effectiveness of cohesion policy in reducing disparities in the poorest regions of the EU

15.6.2007 - (2006/2176(INI))

Committee on Regional Development
Rapporteur: Lidia Joanna Geringer de Oedenberg

MOTION FOR A EUROPEAN PARLIAMENT RESOLUTION

on the role and effectiveness of cohesion policy in reducing disparities in the poorest regions of the EU

(2006/2176(INI))

The European Parliament,

–   having regard to Articles 16, 87(3), 137, 141, 158 and 299(2) of the EC Treaty,

–   having regard to Council Regulation (EC) No 1083/2006 of 11 July 2006 laying down general provisions on the European Regional Development Fund, the European Social Fund and the Cohesion Fund[1],

–   having regard to Council Decision 2006/702/EC of 6 October 2006 on Community strategic guidelines on cohesion[2],

–   having regard to the conclusions of the European Council meetings of 23 and 24 March 2000 in Lisbon and 15 and 16 June 2001 in Göteborg,

–   having regard to the Commission Communication of 30 May 2007 entitled 'Fourth Report on Economic and Social Cohesion' (COM(2007)0273),

–   having regard to the Commission Communication of 12 June 2006 entitled 'The Growth and Jobs Strategy and the Reform of European cohesion policy: Fourth progress report on cohesion' (COM(2006)0281),

–   having regard to the Commission Communication of 1 March 2006 entitled 'A Roadmap for equality between women and men, 2006-2010' (COM(2006)0092),

–   having regard to the Commission Communication of 5 July 2005 entitled 'Cohesion Policy in Support of Growth and Jobs: Community Strategic Guidelines, 2007-2013' (COM(2005)0299),

–   having regard to the Commission Communication of 17 May 2005 entitled 'Third progress report on cohesion: Towards a new partnership for growth, jobs and cohesion' (COM(2005)0192),

–  having regard the Commission Communication of 26 May 2004 entitled 'A stronger partnership for the outermost regions' (COM(2004)0343),

–   having regard to the Commission Communication of 21 February 1996 entitled 'Incorporating equal opportunities for women and men into all Community policies and activities' (COM(1996)0067),

–   having regard to Court of Auditors Special Report No 10/2006 on ex post evaluations of Objectives 1 and 3 programmes 1994 to 1999 (Structural Funds)[3],

–   having regard to Rule 45 of its Rules of Procedure,

–   having regard to the report of the Committee on Regional Development (A6‑0241/2007),

A. whereas Article 158 of the EC Treaty implies that the Community's goal is to promote harmonious development and reduce disparities between the levels of development of the various regions and the backwardness of the least favoured regions by strengthening economic growth,

B.  whereas the poorest EU regions are regions coming under the cohesion policy convergence objective whose per capita GDP is less than 75% of average per capita GDP for the EU as a whole,

C. whereas the concept of cohesion has not been clearly defined and covers various activities fostering harmonious economic, social and territorial development in the EU regions,

D. whereas the conclusions of its resolution of 24 April 2007 on the consequences of future enlargements on the effectiveness of cohesion policy[4] mentions that the present structure of cohesion policy financing is to be reviewed in view of future enlargements; whereas it also proposes that the financing of regional competitiveness and territorial cooperation has to be more focused on the integration of regional economies and infrastructure of European importance and on helping regions to cope with globalisation and demographic change,

E.   whereas one of the fundamental principle of the European Union is the principle of solidarity, which serves to reduce disparities in the Union's regional development,

F.   whereas, to date, EU cohesion policy has made an effective contribution to the development of many regions of the former cohesion countries (Ireland, Greece, Portugal and Spain), even though some regions are still significantly underdeveloped and whereas its impact in terms of convergence of the poorest regions has helped to increase the prosperity of the EU as a whole,

G.  whereas the aim of cohesion policy is to render Member States and regions economically viable and thus independent from external aid, although the receipt of Structural Funds is not subject to time limitations,

H. whereas there is a lack of detailed information and comparative studies with rankings on the advancement of regions that profit from Structural Funds,

I.   whereas, after enlargement to 27 Member States, the EU now has a population that has risen to nearly 493 million[5], approximately 30%[6] of whom live in the current 100 convergence objective regions, and whereas the disparities between regions in GDP terms in EU-27 are currently significantly larger than they were in EU-15, with average per capita GDP ranging from 24% (south-eastern Romania) to 303% (Inner London) of average EU GDP,

J.   whereas in EU-27 the poorest convergence objective regions are located principally in the new Member States, where the implementation of cohesion policy only recently began, and thus it is impossible to evaluate its success in reducing disparities,

K. whereas in the poorest Member States economic growth is unevenly distributed and tends to be concentrated around urban areas, while in these countries a substantial part of the population lives in rural areas,

L.  whereas regions suffering from economic poverty resulting from a lack of basic infrastructure, restricted access to public services and high unemployment are becoming depopulated at a faster rate than other regions and whereas this, in turn, undermines their ability to secure genuine development,

M. whereas Article 299(2) of the EC Treaty requires the Community to adjust its policies and to apply special and specific measures to the outermost regions, given the specific situation of these regions, most of which are among the poorest regions of the EU, a factor which severely handicaps their development because of the combined and lasting effects of structural and geographic disadvantages,

N. whereas in some of the new Member States the uptake of funding in the poorest regions coming under cohesion policy was low during the period 2004 to 2006,

O.  whereas, if structural funding is to be successfully implemented, close coordination is required between authorities at local, regional, national and Community levels,

P.  whereas the fact that funding has been granted does not guarantee per se that it will be put to good use, and whereas authorities in poor regions often lack the appropriate skills and experience and the essential matching funds to be able to make full use of the cohesion funding to which they are entitled,

Q. whereas there are a number of reasons for the economic backwardness of individual regions and whereas the poorest EU regions above all lack the basic infrastructure that is essential for balanced sustainable development and further investment, as well as adequate human resources and adequate incentives for education, lifelong learning and innovation,

R.  whereas private equity, venture capital, rotating funds and micro-credits for start-ups play an essential role as a driving force for entrepreneurship, innovation and job creation,

S.  whereas social exclusion and extremely high long-term unemployment rates are particularly prevalent in the poorest regions, especially among women and the elderly, disabled persons and vulnerable ethnic groups,

T.  whereas fundamental citizens' rights include equal access for men and women to all utilities, equal opportunities on the labour market and equal access to education, culture and health and social services,

1.  Urges that resolute action be taken to reduce the most acute development shortfalls in the poorest EU regions, and notes in particular that the new Member States, which have come under cohesion policy since 2004, require special support owing to their ongoing institutional, administrative and economic difficulties;

2.  Stresses the importance of analysing historical developments in the cohesion countries of EU-15; calls on the Commission, in cooperation with the Member States concerned, their regions, local authorities and other interested parties, to clearly highlight on one hand growth generating measures in successful regions (such as Ireland) and on the other hand the main obstacles in the regions lagging behind, so that the impediments do not arise again in the regions of the new Member States;

3.  Draws the attention of the Commission and the Member States to the situation of regions which, despite being the poorest in EU-15 and despite the lack of improvement in their development data, are no longer considered the poorest regions of EU-27 for purely statistical reasons; recommends that consideration be given to the specific situation of those regions;

4.  Takes the view that funding uptake difficulties are a major and pressing concern, particularly for the new Member States, which are finding it difficult to satisfy complicated cohesion policy requirements and often lack sufficient own contribution (private or public) capital to pre-finance Community grants, because of the procedural difficulties and time restrictions involved in implementing projects, as a result of which potential beneficiaries are unable to obtain or even claim funds which they could put to good use;

5.  Is concerned that in some regions Community assistance is poorly targeted, with the result that the situation in those regions fails to improve despite many years of funding and that Community resources are squandered;

6.  Suggests that EU cohesion policy should take due account of the diversity of the needs of the poorest regions, with aid being tailored to their specific features and conditions and their potential being exploited, so as to implement projects that produce lasting results and genuine development on the basis of multiannual development plans taking due account of spatial development plans;

7.  Recommends that EUcohesion policy of the EU be adapted to the outermost regions as referred to in Article 299 (2) through special, specific measures;supports the strategy deployed by the EU to help its outermost regions, and calls on the Commission rapidly to give details of the substance of the ‘stronger partnership’ that it has announced, particularly with regard to improving the competitiveness of the outermost regions and its action plan for the wider neighbourhood;

8.  Recommends that, with a view to speeding up economic growth, further investment and balanced sustainable development in the poorest regions, regions and Member States give priority to projects designed to make regions more accessible by providing them with basic infrastructure, particularly in the transport and ITC fields, having due regard for the social and environmental impact of such projects;

9.  Calls on Member States and regional and local authorities to take due account of the need for balanced development within individual regions when planning future regional development programmes; believes it particularly important for account to be taken of the specific needs of urban areas, with an appropriate urban policy including a housing policy for 'poor neighbourhoods', and for an appropriate rural policy to be pursued;

10. Believes it is particularly important to attribute more competences in cohesion policy to cities so that they can react in partnership to the specific needs of urban areas; in this context calls on the Commission and Member States to fully exploit the potential of integrated development plans where cohesion policy can directly be linked with town planning;

11. Encourages Member States to make the poorest regions more attractive to investors by drawing on those regions' natural and cultural assets in order to develop traditional forms of economic activity specific to each region and to create new forms of economic activity; accordingly urges the Commission to concentrate more on identifying and supporting measures to conserve the specific skills and customs still surviving in isolated regions of Europe which are lagging behind;

12. Welcomes the focus on using cohesion policy to enhance the Community's innovation capacity over the period 2007 to 2013; notes that this objective should also apply to the poorest regions; places particular emphasis on the need to reduce the technology gap within and between regions and Member States by bolstering technological cooperation networks;

13. Reminds the Commission and the Member States that any assessment of cohesion policy should lead to improved innovative cohesion policy in any enlarged Union of the future; recalls the need to focus on new concepts of territorial development and more specific ideas for supporting the development of regional critical mass surrounding urban areas and other regional clusters; also recalls the need to use a differentiated approach to the use of Structural Funds specific to the needs of all regions;

14. Calls on the Commission and Member States to support projects that increase regional capacity to generate and absorb new technologies, particularly those relating to environmental protection and the development of natural resources and involving the dissemination of models based on lower energy consumption and the use of renewable energies, so that the regions can develop a lead in eco-innovation without having to endure negative non-sustainable development aspects experienced by other regions in their development cycle;

15. Stresses the importance of territorial cooperation (cross-border, transnational and interregional) in the context of the EU's cohesion policy in order to promote balanced development; encourages in this regard the setting up of regional and sectoral cooperation networks, involving, especially the poorest regions;

16. Encourages the Commission, Member States and local authorities to promote entrepreneurship in the poorest regions by means of an integrated system of economic and social incentives for investors, and draws attention to the need for significant simplification of administrative procedures, particularly in relation to the setting up of new, and expansion of existing, economic activities;

17. Encourages Member States to promote entrepreneurship in schools and to support training schemes for future entrepreneurs, aimed in particular at young people, women, elderly persons and minorities exposed to social exclusion;

18. Welcomes new instruments such as the Joint European Resources for Micro to Medium Enterprises (JEREMIE) and Joint European Support for Sustainable Investment in City Areas (JESSICA) initiatives; nevertheless points to the fact that these instruments came late to be fully utilised and that awareness of their possibilities at local and regional level is still very low; notes the pressing need for such instruments to be disseminated and applied as widely as possible in the Member States, and applied in accordance with the actual situation in those States, with account being taken of the real needs of the potential beneficiaries and their capacity in practical terms to make use of these instruments;

19. Calls on the Commission to step up efforts to provide technical assistance to Member States and regions by setting up an appropriate training programme; welcomes the Joint Assistance in Supporting Projects in European Regions (JASPERS) initiative to provide assistance in implementing large projects;

20. Welcomes the recently introduced 'Regions for economic change' initiative and the commitment expressed therein to disseminating best practices that, in the past, have had a clearly positive impact and have contributed to regional economic growth; calls, accordingly, on the Commission to ensure that the poorest EU regions are included in the best-practice exchange network, while also describing such practices on a public website in all official EU languages;

21. Encourages Member States to set up public-private partnerships (PPPs) as an effective means of involving private capital in the funding of regional projects; suggests, in this connection, that simple and transparent rules governing the setting up of such partnerships should be laid down given their long-term impact on public finances;

22. Calls on the Commission to step up its effort to make directives, rules and guidelines easier to understand, with a view to preventing misinterpretation and to facilitating programme implementation;

23. Encourages the Member States and the Community institutions further to simplify procedures with a view to ensuring that funds are allocated in a transparent and efficient manner and delivered swiftly to final beneficiaries; in this context also suggests that the concept of single contacting points be fully exploited and that control procedures on the use of funds be strengthened; also encourages Member States to comply with the European Transparency Initiative and the responsibility of the managing authority for organising the publication, electronically or otherwise, of the list of beneficiaries, the names of the operations and the amount of public funding allocated to operations, as laid down in Article 7(2)(d) of Commission Regulation (EC) No 1828/2006[7] of 8 December 2006;

24. Calls on the Member States to ensure effective political, technical and administrative coordination and effective compliance with the partnership principle aimed at the sound management of funds; expresses concern at the lack of properly functioning coordination and partnership mechanisms in the poorest regions;

25. Draws the attention of the Commission and the Member States to the fact that, with a view to securing balanced development, synergies need to be established between economic, social and environmental aspects, drawing on an analysis of the reasons for economic backwardness, with particular reference to unemployment and its underlying structures, especially in the poorest regions;

26. Stresses that the unemployment rate in some of the poorest EU regions is higher than 20%; expresses concern at the fact that unemployment is a problem that affects the poorest regions in particular and remains higher among women and minorities exposed to social exclusion ; calls on Member States to provide support for women on the labour market and to even out pay disparities between women and men; calls furthermore for attention to be given to very specific situation of the Roma population, for which the problem of long-term unemployment is critical;

27. Stresses the need for the European Social Fund to be put to good use, investing in human capital in the poorest regions by ensuring better education provision and steadily increasing qualification levels, particularly among young people, women and the elderly, and minorities exposed to social exclusion, and by investing in accompanying actions and relevant support and community and care services that improve employment opportunities;

28. Stresses that equal opportunities for women and men should be promoted at all stages of the formulation and implementation of projects coming within the sphere of EU cohesion policy;

29. Notes that 2007 has been designated European Year of Equal Opportunities for All and calls on the Commission and Member States to promote projects to raise awareness of gender mainstreaming in all Community programmes, particularly those with an impact on economic and social cohesion;

30. Calls on the Commission to improve the system used to assess cohesion policy, and to devise a new means of measuring regional development, based not just on GDP but also on other indicators such as unemployment rates and other quantitative and qualitative indicators, whilst improving the methodology for the calculation of Power Purchasing Parities, namely through the development of regional rather than national indicators;

31. Calls on the Commission to provide it, on a regular basis, with up-to-date, reliable and comparable statistics enabling it to accurately assess progress in the development of the poorest EU regions;

32. Calls on the Commission to analyse the impact of cohesion policy and look into the causes of any undesirable outcomes arising from Community policies in its 2009 mid-term review of the Community budget and in the next report on economic and social cohesion, with a view to ensuring that cohesion policy is as effective as possible throughout the 2007-2013 programming period;

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

• [1]  OJ L 210, 31.7.2006, p. 25. Corrigendum published OJ L 239, 1.9.2006, p. 248.
• [2]  OJ L 291, 21.10.2006, p. 11.
• [3]  OJ C 302, 12.12.2006, p 1.
• [4]  Texts Adopted, P6_TA(2007)0130.
• [5]  492 852 386. Source: Eurostat/US Census Bureau.
• [6]  Source: Eurostat, Statistics in Focus – Economy and Finance 17/2006.
• [7]  OJ L 371, 27.12.2006, p. 1.

EXPLANATORY STATEMENT

EU cohesion policy is entering a new programming period. This is the first year in the 2007-2013 financial perspective period in which new cohesion policy regulations apply. Strategic guidelines have been adopted and the broad lines of the policy have been laid down. Now is the time for appropriate recommendations to be put forward with a view to making the new cohesion policy as effective as possible. On the basis of statistics showing the impact that cohesion policy has already had and an awareness of the problems that prevented some countries from drawing the full benefits from structural funding in the past, this own-initiative report seeks to ensure that cohesion policy will be as effective as possible in the 2007-2013 programming period, so that its impact will be as visible and perceptible as possible, particularly in the poorest EU regions.

It is vitally important to place the emphasis on the principles on which the Member States and the EU could base action to enhance cohesion policy's effectiveness in the poorest regions and secure the best possible results in terms of social, economic and territorial cohesion in those regions. Funding has already been earmarked for regions coming under the Convergence Objective in the 2007-2013 financial perspective, and it must now be ensured that that funding is actually taken up with a view to bringing the poorest regions up to a least the EU 27 average development level. This should enable the disparity between the richest and poorest EU regions, which is currently enormous, to be progressively reduced.

Most of the poorest regions are located in the new Member States, which often lack the administrative capacity, skills and experience required in order to make use of the funding available. This report contains a number of recommendations and remarks aimed at improving the uptake and use of structural funds and thus achieving sustainable development in the poorest regions.

The main goal of EU cohesion policy is to reduce development disparities among regions; swift development of the poorest regions is in the interests of the entire Union. Currently, 100 of what are considered to be the poorest regions – i.e. whose per capita GDP is less than 75% of the EU average – come under the cohesion policy's Convergence Objective.

Disparities between regions in per capita GDP terms are extremely large, and are higher in the EU 27 than they were in the EU 15. These disparities are illustrated in Table 1 below.

Table 1. Regional per capita GDP in the EU 27 – 2004 figures (in PPS, EU 27 = 100)

The 15 regions with the highest GDP			The fifteen regions with the lowest GDP
1	Inner London (UK)	303	1	Nord-Est (RO)	24
2	Luxembourg (LU)	251	2	Severozapaden (BG)	26
3	Bruxelles-Cap. / Brussels Hfdst. (BE)	248	3	Yuzhen tsentralen (BG)	26
4	Hamburg (DE)	195	4	Severen tsentralen (BG)	26
5	Wien (AT)	180	5	Sud-Muntenia (RO)	28
6	Île de France (FR)	175	6	Sud-Vest Oltenia (RO)	29
7	Berkshire, Buckinghamshire & Oxfordshire (UK)	174	7	Severoiztochen (BG)	29
8	Oberbayern (DE)	169	8	Yugoiztochen (BG)	30
9	Stockholm (SE)	166	9	Sud-Est (RO)	31
10	Utrecht (NL)	158	10	Nord-Vest (RO)	33
11	Darmstadt (DE)	157	11	Lubelskie (PL)	35
12	Praha (CZ)	157	12	Podkarpackie (PL)	35
13	Southern & Eastern (IE)	157	13	Centru (RO)	35
14	Bremen (DE)	156	14	Podlaskie (PL)	38
15	North Eastern Scotland (UK)	154	15	Vest (RO)	39

Source: Eurostat news release 23/2007 – 19 February 2007

The above figures published by Eurostat show there to be a huge development gap between the richest and poorest EU regions, with most of the poorest regions being located in central and eastern European Member States which joined the Union during the last two enlargements (2004 and 2007).

This situation calls for serious action to reduce the disparities between the richest and poorest regions. With a view to enabling them to secure balanced development, regions lagging behind in development terms, undergoing restructuring or suffering from specific geographical, economic or social handicaps[1] should, in addition to the funding available, be given technical assistance in order to enable them to deal with the procedural difficulties surrounding the implementation of EU cohesion policy.

Cohesion policy has enabled many previously poor EU regions to reach a satisfactory level of development. With the assistance of structural and cohesion funding all four of what were previously known as the 'cohesion countries' (Ireland, Greece, Portugal and Spain) have experienced remarkable levels of economic growth.

Table 2.

Ground made up by cohesion countries in terms of per capita GDP (EU =100)

                                  Spain Portugal       Greece Ireland

1960	60.76	40.48	44.78	64.52
1970	74.89	51.97	64.50	62.97
1980	74.46	57.11	71.79	67.40
1990	77.94	62.97	59.41	75.30
2000	82.29	68.37	65.51	115.26
2002	84.48	69.23	66.59	122.26

Source: Catching-up in Europe: The experiences of Portugal, Spain and Greece in the Nineties, Karl Aiginger; Wifo (Österreichisches Institut für wirtschaftsforschung) Working Papers, No 212, December 2003, p. 4.

The lack of comprehensive or sufficiently comparable statistics on development in the poorest regions is preventing an accurate analysis being made of the degree to which structural funding has contributed to regional development. However, a general analysis of GDP figures shows that over the period between the 'Sixties and 2002, Spain's GDP rose from 60.76% to almost 85% of the Community average, Portugal's from 40% to 69%, Greece's from 44% to 66% and Ireland's from 65% to 122%.

On the basis of these positive examples, it may be assumed that the Member States coming under the current Convergence Objective will, in their turn, take advantage of the opportunities that the new cohesion policy is offering them, particularly since, despite the fact that their GDPs are lower than the EU average, they have an economic growth rate that is well above the EU average and thus show great development potential.

Table 3.

Real GDP growth rate

GDP growth rate – percentage change over previous year

(the figures for 2006, 2007 and 2008 are forecasts)

1997 -98 -99 -00 -01 -02 -03 -04 -05 -06 -07 -08

Bulgaria	-5,4	3,9	2,3	5,4	4,1	4,9	4,5	5,6	5,5	6,0	6,0	6,2
Romania			-1,2	2,1	5,7	5,1	5,2	8,4	4,1	7,2	5,8	5,6
EU 25	2,7	2,9	3,0	3,9	2,0	1,2	1,3	2,4	1,7	2,9	2,4	2,4
EU 15	2,6	2,9	3,0	3,9	1,9	1,1	1,1	2,3	1,5	2,7	2,2	2,3

Source: Eurostat

As can be seen from Table 3, the two countries which joined the EU in 2007 – Bulgaria and Romania – show a particularly high economic growth potential. If this potential is to be fully realised, proper preparations need, first and foremost, to be made, and this includes effective administration.

However, the statistics for the uptake of funding over the initial two-year period show that, despite the major economic progress achieved, the Member States that joined in 2004 failed to make full use of the funds available to them up to 2006, owing mainly to what may be generally termed administrative inefficiency.

Table 4.

Structural and cohesion funding uptake in the EU 10 (May 2004 to September 2006)
€ millions	(1) Commitments	(2) Payments	(2)/(1)
EU 10	21 494.5	5 622.8	26.2%
Czech Republic	2 224.3	521.9	23.5%
Estonia	604.4	177.7	29.4%
Cyprus	93.6	18.1	19.3%
Hungary	2 945.9	959.0	32.6%
Latvia	1 092.8	274.8	25.2%
Lithuania	1 380.0	353.9	25.6%
Malta	86.4	22.7	26.2%
Poland	11 015.2	2 701.5	24.5%
Slovenia	415.5	141.9	34.1%
Slovakia	1 636.6	451.6	27.6%

Source: Presentation by Dalia Grybauskaitė, Commissioner with responsibility for financial programming and budget, Brussels, 21 September 2006.

There are a large number of examples of new Member States failing to make use of the funding available. The poorest regions tend to experience the most difficulties in taking up funding. The authorities in those regions often lack the necessary skills, experience or matching funds to deal with complicated cohesion policy requirements, and are thus unable to claim the funds to which they are, in principle, entitled.

It must be stressed that institutional capacity is an essential precondition for successful programme and project implementation and human resource development. During the pre-accession aid period various programmes revealed a large number of institutional, managerial and administrative shortcomings on the recipients' side. These shortcomings that have not yet been fully made good, but must be addressed in the very near future if funds are to be properly invested and spent.

There is therefore a need for:

- better administration, so as to enable regions in receipt of funding to take up aid and use it effectively;

- technical assistance, particularly with preparations to implement new projects;

- quality, both externally, in the form of expert knowledge, and internally, in order to be able to determine what is really needed;

- project and spending quality controls and assessment of the sustainability of projects already implemented.

Swift delivery of funds to eligible regions is also important. It sometimes takes too long for funds to reach beneficiaries, which leads to higher project costs. Fund delivery needs to be based on transparent rules and clear criteria.

It is difficult to avoid complex mechanisms for the implementation of structural funding, on which three different levels of regulation have an impact, namely community rules, national frameworks and regional practices. Procedural simplification is therefore an issue that must be addressed at all three levels in order to avoid any subsequent interpretation and to facilitate and speed up programme implementation.

Sound structural fund management calls also for coordination of the various levels (political, technical and administrative). This is a pressing problem in the new Member States in particular, where more effective action needs to be taken. Discussions on ensuring cohesion between the Community, Member States and regions are of essential importance, and no sphere of governance should be left out of this structured dialogue.

Cohesion policy is not just about financing; it is also about partnership between the various stakeholders. Action and cooperation at only one level are not enough to strengthen the leverage effect. Partnership and good information flows are thus particularly necessary. Furthermore, a framework needs to be established within which the necessary interactions can take place, and an experience-exchange system needs to be set up. This could lead to the introduction of rules and standards enhancing administrative capacities in connection with the implementation of rules and regulations.

Economic growth tends to be concentrated around certain areas. This is particularly apparent in central and eastern European countries with fast-growing capital city regions. Urban growth and increasing competitiveness can in many ways serve as a catalyst for the development of surrounding rural communities. The fact nevertheless remains that economic growth is still lacking in some regions. What is more, even the development hubs themselves – the cities – are having their own problems in poor neighbourhoods, and an effective urban policy should therefore also address the problem of sink estates and social exclusion. In addition to this, regions suffering from economic poverty resulting from a lack of basic infrastructure, restricted access to public services and high unemployment are becoming depopulated at a faster rate than other regions and are in need of a policy that promotes entrepreneurship and protects the population base of such regions, with a view to achieving genuine growth.

Speeding up economic growth in the poorest regions is an essential precondition for achieving and sustaining high standards of living in the Union. Regional convergence within the EU is of crucial importance if the Union is to be globally competitive and strong in the near future. There is, however, a risk that policy impacts will be diminished if regions that are facing development difficulties keep lagging behind, thus deferring an increasing volume of costs.

The specific needs of the poorest regions must be identified and appropriate means need to be found to boost their development by making use of their natural resources, cultural assets and environment, while also paying due attention to their protection and development. The fundamental requirement is to establish what the main needs of each region are and to focus funding on the right objectives.

For the cohesion countries, an infrastructure base for further investments needs to be created. There is no inherent contradiction between competitiveness and the goal of cohesion; however, it is essential to understand in which circumstances the leverage effect boosts growth. To reach a given level of competitiveness poor regions need to have sufficiently developed basic infrastructure. Investment in education and human capital building in the poorest regions is also important because human resources have a decisive influence on, among other things, a region's attractiveness to investors and guarantee future growth.

There is a fundamental need to make greater use of and promote public-private partnerships (PPPs) with a view to developing the poorest regions. Rules governing the implementation of PPPs need to be laid down, and obstacles thereto need to be reduced. Good practice is lacking in new Member States, and the involvement of private capital is of key importance in generating further investments. Financial support should be spent in a transparent manner so as to make it possible to ensure that it helps to meet the objectives that have been set.

Jaspers, Jeremie and Jessica are excellent means of providing support, inter alia, to SMEs at regional level, but Member States and the Commission need to do more to promote them, so as to ensure that full and effective use is made of these initiatives, particularly in the poorest regions.

Economic development is closely connected to innovation, which is a key factor in regional development. EU cohesion policy must, under the Lisbon Strategy, be directed towards increasing the EU’s innovation capacity and it is therefore important for the poorest regions not to be overlooked in efforts to reach this goal. An important factor in promoting innovation is better quality legislation in EU countries, which should foster, rather than block, innovation processes in important sectors of the economy. The poorest regions are likely to be the most vulnerable in this respect.

Active support for entrepreneurship is important for sustainable development of the poorest regions, and this calls for the involvement of all stakeholders. Entrepreneurship should be promoted in particular among women and people entering the labour market, as well as among socially excluded groups

There is a need for synergy between policies at both European and national levels. Policies should complement and not counteract each other. For instance, the concentration of the benefits of other policies in specific countries and regions may dilute the impact of development policies. Regional development must also have a social and an environmental dimension. Therefore, in order to bolster cohesion and effective development in the poorest regions, all stakeholders need to be mobilised and fully involved.

The impact of any clashes between policies should be taken into account and analysed during the 2009 mid-term review of the Community budget and in the fourth report on economic and social cohesion.

Although GDP is a good indicator of regional economic convergence, it is not an adequate means of measuring social or territorial cohesion. For instance, in some poorer regions, economic growth is satisfactory but high unemployment is a problem, and this is having a an adverse impact on the regions' demographic development. It is therefore essential to bring other indicators to bear in order to gain a clear picture of the poorest regions' real needs. The discussions on the fourth cohesion report should include a debate on cohesion indicators and how to measure regional development.

Unemployment – which is hitting the poorest regions hardest – needs to be combated. The existence of long-term unemployment among certain social groups is particularly worrying, as is the directly related problem of social exclusion. With a view to achieving social cohesion, efforts must also be made to ensure the best possible integration of people with disabilities. Equal opportunities for women and men on the labour market are also an essential factor in social cohesion within the EU. There are still significant pay disparities between men and women and this hampers economic growth. An attention to gender-related disparities will enhance the effectiveness of cohesion policy implementation and allow projects to be carried out which are free of gender discrimination and enable a balance to be struck between family life and work.

Information needs to be provided on the need for and means of implementing a gender-equality approach when implementing and evaluating programmes and projects, with better use being made of existing studies and analyses. These principles can be put into practice, for example by ensuring gender-proofed budgeting (for instance, checking whether the budget adequately covers equal opportunities measures), raising gender-awareness among social partners and relevant actors and ensuring the availability of gender expertise. An intelligent approach to gender issues in social and economic life and an avoidance of any stereotyping the social roles based on gender are of essential importance in making cohesion policy more effective.

In order to solve the problems with which the poorest EU regions are struggling, a balanced programme tailored to their specific features is required. Authorities responsible for formulating multiannual plans should pay attention first and foremost to the sustainability of the projects carried out and their impact on regional development. Priority should be given to projects relating to regional accessibility and, thereby, transport and IT & telecoms infrastructure. The creation of a platform based on appropriate economic incentives will increase a region's attractiveness to investors and bring sustainable economic growth that will helps to reduce development disparities.

• [1]  Outermost regions, islands, mountain areas and thinly populated regions.

PROCEDURE

Title

The role and effectiveness of cohesion policy in reducing development disparities in the poorest regions of the EU

Procedure number

2006/2176(INI)

Committee responsible   Date authorisation announced in plenary

REGI 6.7.2006

Committee(s) asked for opinion(s)   Date announced in plenary

Not delivering opinion(s)   Date of decision

Enhanced cooperation   Date announced in plenary

Rapporteur(s)   Date appointed

Lidia Joanna Geringer de Oedenberg 30.5.2006

Previous rapporteur(s)

Discussed in committee

4.10.2006

23.1.2007

12.04.2007

Date adopted

7.6.2007

Result of final vote

+ - 0

45 1 2

Members present for the final vote

Stavros Arnaoutakis, Elspeth Attwooll, Jean Marie Beaupuy, Bernadette Bourzai, Wolfgang Bulfon, Antonio De Blasio, Vasile Dîncu, Gerardo Galeote, Iratxe García Pérez, Eugenijus Gentvilas, Ambroise Guellec, Zita Gurmai, Gábor Harangozó, Filiz Husmenova, Mieczysław Edmund Janowski, Gisela Kallenbach, Tunne Kelam, Evgeni Kirilov, Miloš Koterec, Constanze Angela Krehl, Jamila Madeira, Sérgio Marques, Yiannakis Matsis, Miroslav Mikolášik, James Nicholson, Lambert van Nistelrooij, Jan Olbrycht, Maria Petre, Wojciech Roszkowski, Elisabeth Schroedter, Dimitar Stoyanov, Andrzej Jan Szejna, Kyriacos Triantaphyllides, Oldřich Vlasák, Vladimír Železný

Substitute(s) present for the final vote

Jan Březina, Den Dover, Mojca Drčar Murko, Emanuel Jardim Fernandes, Lidia Joanna Geringer de Oedenberg, Ljudmila Novak, Francisca Pleguezuelos Aguilar, Zita Pleštinská, Christa Prets, Samuli Pohjamo, Toomas Savi, Gheorghe Vergil Şerbu, László Surján

Substitute(s) under Rule 178(2) present for the final vote

Date tabled

15.6.2007

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