8 Economic and social cohesion of the
European Community
| (28692)
10107/07
+ ADDs 1-3
COM(07) 273
| Commission's fourth report on economic and social cohesion
|
| Legal base | — |
| Document originated | 30 May 2007
|
| Deposited in Parliament | 14 June 2007
|
| Department | Trade and Industry
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| Basis of consideration | EM of 28 June 2007
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| Previous Committee Report | None
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| To be discussed in Council | No date set
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| Committee's assessment | Politically important
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| Committee's decision | Cleared; but further information requested
|
Legal background
8.1 The main provisions of the EC Treaty on economic and social
cohesion are as follows:
- Article 2 makes the promotion of "economic and social
cohesion and solidarity among Member States" one of the European
Community's tasks.
- Article 146 establishes the European Social Fund
(ESF) "to improve employment opportunities for workers in
the internal market and contribute thereby to raising the standard
of living".
- Article 158 provides that "the Community
shall aim at reducing disparities between the levels of development
of the various regions and the backwardness of the least favoured
regions or islands, including rural areas".
- Article 159 says that the Community is to support
the achievement of the objectives of Article 158 through, among
other things, "the Structural Funds". It also requires
the Commission to report every three years on progress towards
achieving economic and social cohesion and how EC policies and
programmes have contributed to it.
- Article 160 provides that the European Regional
Development Fund (ERDF) is "intended to redress the main
regional imbalances in the Community through participation in
the development and structural adjustment of regions whose development
is lagging behind and in the conversion of declining industrial
regions".
- Article 161 provides that the Cohesion Fund is
to provide financial contributions to environmental projects and
trans-European transport infrastructure networks. Financial assistance
from the Cohesion Fund is available to Member States with a GDP
of less than 90% of the EU average.
The Structural Funds 2000-06
8.2 Between 2000-2006, the Structural Funds comprised:
- the ERDF;
- the ESF;
- the guidance section of the European Agricultural
Guidance and Guarantee Fund; and
- the Financial Instrument for Fisheries Guidance.
8.3 The allocation of financial support from the
Structural Funds was primarily related to three aims:
- Objective 1— to promote
the development and structural adjustment of regions whose per
capita GDP was less than 75% of the Community average and remote
regions (such as the Azores and the most northern areas of Finland
and Sweden);
- Objective 2 —to assist regions seriously
affected by industrial decline; and
- Objective 3 — to combat long-term unemployment
and facilitate the integration into working life of young people
and people excluded from the labour market outside Objective 1
regions.
Access to the Funds was dependent on the Member State
providing matching funding.
The Structural and Cohesion Funds 2007-13
8.4 In 2006, the Council adopted Regulations establishing
the ERDF, ESF and Cohesion Funds for 2007-13.[17]
The total budget of the three Funds for that period is €307.6
billion. The Funds are to contribute to the achievement of three
objectives:
- Convergence (funded from the
ERDF, ESF and Cohesion Fund);
- Regional competitiveness and employment (funded
from the ERDF and ESF); and
- Territorial cooperation (funded from the ERDF).
8.5 The aim of the Convergence objective is to speed
up economic growth and employment in the least developed regions
by, for example, investment in transport, energy, health, education
and environmental infrastructure projects. Regions with a per
capita GDP of less than 75% of the average GDP of the EU are
eligible for Convergence assistance from the ERDF and ESF. (Regions
with a per capita GDP of more than 75% of all the Member
States but with less than 75% of the average of the 15 older Member
States are eligible for decreasing transitional support.) Member
States with a per capita GDP of less than 90% of the EU
average are eligible for convergence assistance from the Cohesion
Fund.
8.6 The aim of the Regional competitiveness and employment
objective is to provide funding from the ERDF and ESF for regions
not eligible for Convergence assistance in order to deal with
the difficulties caused by, for example, industries or urban areas
in decline and rural areas with highly dispersed or ageing populations.
8.7 The aim of the European territorial cooperation
objective is to strengthen cross-border cooperation to find joint
solutions to shared problems, such as flooding around a shared
river basin.
The Commission's fourth report on economic and
social cohesion
8.8 This is the fourth of the progress reports which
the Commission is required to produce at three-yearly intervals
by Article 159 of the EC Treaty. It is in five sections:
Section 1 summarises what has been the added value
of cohesion policy so far.[18]
Section 2 summarises the progress of cohesion up
to the end of 2006 under three headings — economic cohesion;
social cohesion; and territorial cohesion.
Section 3 summarises the policies and legislation
the Community has adopted for the Structural and Cohesion Funds
between 2007 and 2013.
Section 4 identifies the main challenges facing the
EC which are particularly relevant to cohesion policy —
they are: increasing global pressure to restructure and modernise;
climate change; increasing prices for energy; emerging demographic
imbalances and social tensions; and the increasing difficulty
for Member States of keeping up with the pace of change.
Section 5 sets out the next steps the Commission
proposes to take (see below).
The report is supported by three volumes which provide
large amounts of detailed statistical information and analysis.
8.9 In Section 5, the Commission refers to its preparations
for the review of the EC budget in 2008-09. It also notes that
it is arranging a Cohesion Forum on 27-28 September. The Commission
suggests fourteen questions the Forum might consider, such as:
- what lessons can be drawn form
the experience of preparing the Structural and Cohesion Fund programmes
for 2007-13?
- Is cohesion policy adapted to the new challenges
set out in section 4 of the report?
- What are the key skills and competences that
people need to develop to help deal with those challenges?
- How can cohesion policy become more effective
in supporting the activities and policies of Member States and
regions?
- What would be the best allocation of responsibility
for managing the cohesion programmes?
The Government's view
8.10 The then Parliamentary Under-Secretary at the
Department of Trade and Industry (Lord Truscott) tells us that
changes in economic and social conditions are the consequence
of many things, of which EC cohesion policy is only one. Commenting
on the reference in the Commission's report to the review of the
EC budget, the Minister says:
"We believe that there are three principles
that can help to guide us towards a modern EC budget. These will
underpin our approach to the EC budget review:
i) that the EU should act only where there are clear
additional benefits from collective efforts compared to actions
taken solely by the individual Member States … :
ii) where EU level action is appropriate, it should
be proportionate and flexible … ; and
iii) the highest standards of financial control are
necessary, together with continuing budget discipline.
"In line with these principles, we believe
that the Structural Funds should be focussed on the poorest Member
States, where they can add the most value. This will assist them
in making the necessary infrastructure and institutional investments
needed to support their economic growth. In turn this will help
to develop the wider EU economy. We are supported in our view
by other budget disciplinarian Member States such as the Netherlands."
8.11 The Minister also tells us that, in addition
to organising the Cohesion Forum, the Commission will initiate
public consultations in September on the challenges for cohesion
policy in the future. The Government will make a formal response
to the consultations.
Conclusion
8.12 The Commission's report and the supporting
volumes contain a wealth of information about the actual and forecast
social and economic changes in the Member States and regions.
As the Minister says, such changes are the result of many influences.
But we recognise the contribution the Structural and Cohesion
Funds have made to growth and the reduction in poverty, particularly
in the poorest countries.
8.13 We should be grateful if the Government would
tell us about the proceedings of the Cohesion Forum in September
and send us a copy of its response to the Commission's consultation
document. Meanwhile, we clear the report from scrutiny.
17 (27413) 8216/06: see HC 34-xxv (2005-06), para 12
(19 April 2006). Back
18
The Commission uses "cohesion policy" as shorthand for
the policies underlying the Structural Funds and the Cohesion
Fund taken together. Back
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