Memorandum by Global Vision
1. What should be the objectives of the EU's
Structural Funds? How can the Funds become more effective in supporting
public policies in Member States and regions?
What mechanisms of delivery could make the policy
more performance-based and more user-friendly?
We take a minimalist approach. The EU's Structural
Funds should primarily be geared towards helping the poorest Member
States catch up in terms of prosperity with the richest. The richest
states should be taken out of the funding mechanisms altogether
and be left to decide their own strategy for supporting their
poorest and most under-performing regions. Funding for the poorest
Member States should primarily aim to improve their economic competitiveness
and growth prospects by focusing on enterprise and innovation,
infrastructure, and skills and employment. Environmental considerations
should also be taken into account.
The issue of making the Funds more effective
in supporting public policies in the poorest Member States can
only really be addressed if detailed knowledge of the relevant
national public policies is available. The delivery of the Funds
should be individually tailored to projects relating to the particular
needs of these most vulnerable countries and be fully coordinated
with their national policies.
If the Funds were geared towards the poorest
Member States, instead of to all EU27 states, the task of tailoring
individual policies would be a much more manageable task. Administrative
costs and the alleged losses through fraud would also be reduced.
The current approach smacks of a quite inappropriate "one
size fits all" approach to Member States—even though
they have hugely disparate economies. (This is especially true
since the accession of Bulgaria and Romania.) The EU's regional
policies would surely be more effective if more resources went
into planning carefully individualized projects, the spending
on which is thoroughly tracked and audited, rather than maintaining
grand, very expensive, EU-wide schemes.
Concerning the Funds' delivery mechanisms to
make them more performance-based and user-friendly, they should
be dealt with a case-by-case approach with a clear focus on improving
growth prospects.
2. Do Structural Funds meet the principle
of subsidiarity? Could the same cohesion objectives be met through
repatriation of the distribution of these funds?
They clearly do not. Gordon Brown has, for example,
said that "when the economic and social, as well as democratic,
arguments on structural funds now and for the future so clearly
favour subsidiarity in action, there is no better place to start
than by bringing regional policy back to Britain".[9]
,[10]
Concerning the repatriation of the distribution
of the funds rich countries should simply be taken out the EU's
Structural Funds system altogether, as already proposed. These
countries do not need to be involved in economic cohesion policies.
For the poorest countries, there is a strong case for the Commission
and the national Governments working together to develop support
packages that complement national policies and give the best expected
return, in terms of boosting growth prospects, for the EU funding
provided.
3. What impact has enlargement had on Structural
Funds, and are any changes necessary to meet the challenges of
further enlargement?
Clearly the two most recent enlargements, with
the accession of relatively poor countries, have significantly
changed the balance of affluent and less affluent countries within
the EU. The EU has become a much more economically disparate group
of countries. As already indicated the accession of the very poor
countries of Romania and Bulgaria in 2007 was of special significance.
The dramatic changes to the make-up of the EU should have been
taken as the opportunity to radically rethink the role of the
EU's Regional Policy along the lines indicated above (question
1).
Concerning further enlargement it all depends
on its extent. Croatia is waiting in the wings for membership.
As it is a relatively small country its accession, in itself,
would hardly justify a major reappraisal of the EU's approach
to regional policy. If Turkey, a large and poor country, were
ever to become a full member (which is unlikely) then its accession
would surely call for a major reassessment—making a radical
change in policy strategy along the lines already suggested all
the more necessary.
4. How will the EU's commitments on combating
climate change manifest themselves in the distribution of Structural
Funds for the post-2013 period? How will the response to other
challenges facing the EU economy (eg migration, growth of the
service sector) shape future policies?
The funding will have to be geared more towards
those countries that, other things being equal, have the most
to lose (and/or will incur the greatest costs) by restricting
their anthropogenic carbon dioxide emissions in the belief that
such an activity will combat climate change.
Migration both within the EU and between the
EU and non-EU countries has many ramifications—not least
of all in the UK. Concerning its implications for future policies
for the distribution of Structural Funds, it depends crucially
on other policy objectives insofar as they exist and/or are explicitly
identified. If, for example, one policy aim were to be to stem
intra-EU migration, then it could be argued that the process of
building up the poorest countries should be accelerated. Funding
support would, therefore, be stepped up. Concerning the growth
of the growth of the service sector, this should not be regarded
as a challenge to be responded to, but rather an almost inevitable
development of maturing economies.
5. What criteria should guide decisions on
the proportion of the EU budget to be allocated to Structural
Funds?
The EU's criteria for deciding the budget allocation
to the Structural Funds depend crucially on its priorities as
a political entity. But just what are the EU's priorities? How
does, for example, the EU balance its ambitions to be an international
power and an economically dynamic economic region; and its objective
of supporting EU agriculture and reducing income inequalities
between Member States? The EU has to make these decisions and
decide which of these aims (and doubtless countless others) deserve
funding. Then, and only then, can the EU decide what proportion
of its budget should be allocated to funding its various objectives—including
the proportion of the budget allocated to the Structural Funds.
If, for example, the EU decided that it would
shrink the funding for CAP asymptotically to zero, admittedly
highly unlikely, then the proportion of the budget available for
other projects would clearly rise.
6. Are the current eligibility tests for
regions to receive support under the EU's Structural Funds relevant,
fair and appropriate? Should they remain in place after 2013?
Is it appropriate that they are discussed simultaneously with
wider agreements on allocating EU budget spending?
Given our earlier comments on the Structural
Funds, it must be clear that we believe the current system is
fundamentally flawed. The whole system, including eligibility
tests for the Structural Funds, should be re-constructed. 2013
onwards is the next obvious opportunity to radically change the
system.
It is probably appropriate that the eligibility
tests are discussed in the context of the overall allocation of
EU spending. They doubtless serve to focus the collective mind
on just what the EU's priorities should be. And, given the horse-trading
that accompanies debates over the Budget, such discussion is probably
inevitable.
7. What would be the effect of linking the
availability of Structural Funds with compliance to Broad Economic
Policy Guidelines?
The Broad Economic Policy Guidelines, as revised
in 2005 to deliver "integrated guidelines for growth and
jobs" and grouped as macroeconomic guidelines, microeconomic
guidelines and employment guidelines, are a constructive and systematic
way forward. They could, of course, be modified and improved,
and they are perhaps too bureaucratic and inflexible. But this
is a secondary issue.
If the availability of Structural Funds is to
focus on improving competitiveness and growth prospects, then
linking the availability of Structural Funds with compliance to
the Broad Economic Policy Guidelines should be considered as a
sensible starting point. It could be a positive step towards focusing
funding on policies explicitly aimed at improving economic performance.
9 January 2008
9 Times, 6 March 2003, quoted in Open Europe, Why the
EU should not run regional policy, Open Europe, December 2007. Back
10
HM Treasury & DTI, A Modern regional Policy for the UK,
March 2003 was also critical of the inflexibility of EU regional
policy. Back
| 
