Investments for growth & jobs Promoting development and good governance in EU regions and cities

Regional & Urban PolicyRegional & Urban Policy

Investments for growth & jobs

Promoting development and good governance in EU regions and cities

6th Report on economic, social and territorial cohesion, July 2014


Key messages & conclusions

Rudolf Niessler, Director of the Policy DirectorateDG for Regional and Urban Policy


6th Cohesion Report

• Art. 175 of the consolidated treaty:'The Commission shall submit a report to the European Parliament, the Council, the Economic and Social Committee and the Committee of the Regions every three years on the progress made towards achieving economic, social and territorial cohesion …'

• Exceptionally, the report has been delayed by one year to report on the new Cohesion Policy programming period


New structure instead of old

1. Smart growth2. Inclusive growth3. Sustainable growth4. Public investment, growth

and the crisis5. Good governance6. Evolution of Cohesion

Policy7. Impact of Cohesion Policy8. Cohesion Policy in 2014-

2020

1. Economic, social and territorial situation

2. National policies and cohesion

3. Other EU policies and cohesion

4. Impact of Cohesion Policy


Regional disparities increased

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 201365

70

75

80

85

90

95

100

105

110

115

120

65

70

75

80

85

90

95

100

105

110

115

120GDP per head Unemployment rateCoefficient of variation, 2000=100

Coefficient of variation of GDP per head, employment rate (15-64), unemployment rate, EU-27 NUTS 2 regions, 2000-2012

Source: Eurostat, DG REGIO calculations


Economic disparities

• Crisis halted regional economic convergence

• National GDP projections show slow convergence post-crisis

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

-6

-4

-2

0

2

4

6

8

-6

-4

-2

0

2

4

6

8

Less developed Member StatesModerately developed Member StatesHighly developed Member States

Annual average change (%)

Growth of GDP per head in real terms, EU-28, 2001-2015

Source: Eurostat


Crisis reinforced role of Cohesion Policy

• Crisis led to a rapid reduction of public investment as a part of the fiscal consolidation efforts

2007 2008 2009 2010 2011 2012 2013200

220

240

260

280

300

320

340

200

220

240

260

280

300

320

340

EU-28 Public investment (GFCF)EU-28 Public investment without 2007-2013 Cohesion Policy payments (ERDF, ESF, CF)

EUR billion at 2005 prices

Impact of Cohesion Policy on public investment, 2007-2013

Source: Eurostat and DG REGIO


Cohesion policy 2007-2013 and national counterpart represents a significant proportion of public investment in Member States

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Slov

akia

Lith

uani

a

Hun

gary

Bulg

aria

Latv

ia

Port

ugal

Esto

nia

Czec

h Re

publ

ic

Pola

nd

Mal

ta

Rom

ania

Slov

enia

Gre

ece

Spai

n

EU 2

7

Italy

Cypr

us

Ger

man

y

Finl

and

Fran

ce

Uni

ted

King

dom

Belg

ium

Swed

en

Aust

ria

Irela

nd

Net

herla

nds

Den

mar

k

Luxe

mbo

urg

Average 2011-2013

SF and CF (and national co-financing) as % of total public investment (GFCF and capital transfers)


Tangible benefits of cohesion policy in 2007-2013

• 594 000 jobs created – at least 262 000 in SMEs• 77 800 start-up companies supported• 2 700 KM of new or reconstructed railways• 25 800 KM of new or reconstructed roads• Broadband access for 5 million citizens• Access to clean drinking water for 3.2 million citizens• ESF: 15 million participants per year• 940 financial instruments in 25 Member States rising EUR 12.6

billion € OP funding (including EUR 8.36 billion structural Funds) for equity, loans and guarantees


Cohesion Policy 2014-20 in the EU economic policy mix

Country-specific recommendations are the reference for Partnership

Agreements and programmes


Cohesion Policy 2014-2020

• Focus on growth-enhancing investments

• Concentration on Europe 2020 priorities

• Improving governance

• Linked to the European Semester

• Linked to structural reform through ex-ante conditionalities


State of programming 2014-2020

• 16 Partnership Agreements (PAs) adopted• All remaining PAs have been commented and will

be adopted by the end of the year• 197 out of the 205 REGIO-led Operational

Programmes (Ops) have been submitted.• 181 out of 187 ESF/YEI OPs have been submitted,

incl. 33 OPs covering YEI• So far 6 OPs have been adopted.


11. Good governance

10. Education

09. Social inclusion

08. Employment

07. Network infrastructure

06. Environment

05. Climate change adapta-tion

04. Low-carbon economy

03. SMEs support

02. ICT

01. Innovation and R&D

0 5 10 15 20 25 30 35 40 45

1.1

6.2

11.0

2.9

25.6

15.5

3.6

30.1

32.7

13.7

40.0

3.2

26.3

20.9

30.733.5

17.0

3.5

7.7

ESF ERDF CF

EUR billion at current prices

Allocation to thematic objectives by Fund (EUR), 2014-2020

Source: Final and draft partnership agreements as of 1 June 2014


ESF Priorities (TOs 8-11)

Network infrastructure

(TO 7)

Climate change adaptation andenvironment

(TOs 5-6)

ERDF concentration priorities (TOs 1-4)

0 5 10 15 20 25 30 35 40 45

30.2

22.8

15.8

31.2

31.5

18.2

12.1

38.2

2014-2020 2007-2013

% of total (excl. Tech. Assist.)

Allocation by thematic objective, EU-28, 2014-2020 and 2007-2013

Source: SFC and Final and draft partnership agreements as of 1 June 2014


Ex-ante conditionality is challenging

11. Good Governance

10. Education

09. Social inclusion

08. Employment

07. Network Infrastrastructure

06. Environment

05. Climate change adaptation

04. Low-carbon economy

03. SME support

02. Information Communication Technology

01. Innovation and R&D

0 2 4 6 8 10 12 14 16 18 20 22 24 26 28

13

20

18

17

16

18

14

14

9

16

18

4

5

7

9

3

5

9

11

15

7

7

3

1

5

3

2

2

2

8

2

3

2

4

2

3

3

2

3

3

EAC not com-pletely fulfilled

EAC fulfilled

Not applicable

Not available

Number of MS Source: Commission assessment of PAs Based on information available in June 2014


Next steps

• Full reporting on Cohesion Policy 2014-2020 programming period by end of 2015

• Ex-post evaluation of 2007-2014 by end of 2015• Midterm review/revision of MFF by end of 2016• 7th Cohesion Report in 2017 (including policy

proposals post 2020)


6th Cohesion Report

Manuela GELENGHead of Unit, ESF Policy and LegislationDG Employment, Social Affairs and InclusionEuropean Commission


Overview

1. Employment, social and education trends (chapter 2 of the Report)

2. Policy framework and ESIF (ch.2)

3. ESF 2014-20 support to institutional capacity building and public administration reform (ch.5/ ch.8)

4. Results of ESF 2007-2013 programmes (ch.7)

5. State of play programming of ESF and YEI OPs (ch.8)


Key trends The crisis has widened disparities in employment

rates; EU2020 employment target of 75% is currently

far from reach; Unemployment highest in the EU in over a

decade; major risks for youth; Early school leaving rates improve but significant

challenges for education and training systems; At-risk-of-poverty rates increased in 17 MS; Severe material deprivation is on the rise 11% of

the EU population in 2012. It is worst in southern and eastern MS.


EU Policy framework and ESIF

The EU2020 policy framework for "inclusive growth": higher employment rates as well as greater focus on social inclusion

EU2020 is now the backbone of the ESIF legal framework 2014-2020 => Funds will have to concentrate on a limited number of priorities (for the ESF, up to 5 investment priorities)

Despite the increasing needs as outlined already, need to ensure value for EU investments.


ESF 2014-20 support to institutional capacity building and public administration reform

ICB is a key EU2020 and CPR priority

Need to differentiate between stricto senso capacity to manage EU funds and the broader needs for comprehensive public administration reforms.

A strategic approach to ICB is a prerequisite for successful reforms (though not present in all MS)


Results of ESF 2007-2013 OPs

Preliminary results of evaluations (end-2012):Access to employment: Around 20 million participations (i.e. cases of

participation in programmes); of which over 3 million found a job soon after the support ended.

20 million young people received support (30% of the total)

Around 500,000 gained qualifications under these measures

Social inclusion: EUR 13 bn of ESF support; at least 164,000

persons entered employment after activation.


Results of ESF 2007-2013 OPs (ctnd)

Education, training and lifelong learning: 10% of total ESF (EUR 35 billion) for education

and training; 25.9 million participations in human capital

development measures 5.5 million low-skilled participated in lifelong

learningInstitutional Capacity Building: EUR 3.7 bn ESF allocated to efficiency of public

administrations and public services; ICB recognised as a goal.


State of play ESF/YEI programming

187 ESF/YEI OPs expected; 181 officially submitted, incl. 33 OPs covering YEI

5 OPs adopted (incl. 2 YEI dedicated OPs) Overall, close link between CSR and MS selection

of investment priorities for the ESF ESF continues to be the main employment and

human capital EU instrument, now boosted also by YEI for youth employment

More could be desired as regards funding allocations to Roma, social systems and PES reforms, education, and the ambition of public administration reforms.


Further information

ESF thematic publications 2014-2020:

Youth employment/YEI: http://ec.europa.eu/esf/BlobServlet?docId=450&langId=en

Promoting inclusive growth: http://ec.europa.eu/esf/BlobServlet?docId=445&langId=en

Promoting Good Governance: http://ec.europa.eu/esf/BlobServlet?docId=444&langId=en

Simplified cost options with the ESF in Italy:http://ec.europa.eu/esf/BlobServlet?docId=453&langId=en

http://ec.europa.eu/esf/BlobServlet?docId=450&langId=en





6th Cohesion Report

Lewis DijkstraDeputy Head of the Economic Analysis UnitDG for Regional and Urban Policy


Chapter 1


Chapter 1


Chapter 1


Chapter 1


Chapter 1


Major roads1955-2030

Chapter 1



Chapter 1



Chapter 1



Chapter 1



Chapter 1



Chapter 1



Chapter 1


Regional competitiveness

• Boosting competitiveness requires more investments in innovation, entrepreneurship, education, digital and physical networks and more exports & FDI

Chapter 1


Chapter 2


Chapter 2


Chapter 2


Chapter 3


Chapter 3


Chapter 3


Malt

a

Luxe

mbo

urg

Belgium

Cypru

s

Hunga

ry

Czech

Rep

ublic

Nethe

rland

s

Slovak

ia

United

King

dom

Poland

Irelan

d

Bulgar

iaIta

ly

Greec

e

Germ

anySpa

in

Croat

ia

Franc

e

Lithu

ania

Roman

ia

Sloven

ia

Eston

ia

Denm

ark

Portu

gal

Austri

a

Finlan

d

Latv

ia

Sweden

EU-28

0

5

10

15

20

25

30

35

40

45

50 Renewable energy consumption, 2006-2012

2006 2012

Target 2020

Sha

re o

f re

new

able

ene

rgy

in g

ross

fin

al e

nerg

y co

nsum

ptio

n, %

Chapter 3


Governance

Poor governance slows down Cohesion Policy implementation, reduces its impact and hinders economic growth and entrepreneurship

Chapter 5


Chapter 5


A growing source of investment

1976

1981

1986

1995

2004

2007

2012

0.00

0.05

0.10

0.15

0.20

0.25

0.30

0.35

0.40

0.00

0.05

0.10

0.15

0.20

0.25

0.30

0.35

0.40

CF ESF ERDF% of gross national income (GNI)

Cohesion Policy expenditure, 1976-2012

Source: DG BUDG, AMECO, DG REGIO calculations

EU-9 EU-10 EU-12 EU-15 EU-25 EU-27

Chapter 6


A stronger focus on key priorities

1989-1993 1994-1999 2000-2006 2007-20130

20

40

60

80

100

Technical assistance

Environment

Employment, educa-tion, social inclusion

Infrastructures (Transport, Energy, Telecom)Business support, R&D and innovation

% of total

Composition of Cohesion Policy investment in less developed re-gions, 1989-2013

Source: DG REGIO

Chapter 6


Europe 2020

• Less developed regions furthest removed from both EU and national 2020 targets

Chapter 6


Impact on EU economies

Evaluations have shown that cohesion investments have contributed to improving the structure of the EU economies by:

• enhancing the performance of enterprises, increase their investment and employment, particularly for SMEs.

• increasing firms activities in R&D and their capacity to innovate• improving public infrastructure• improving the matching between supply and demand on the labour market

At the macro level, model simulations show that Cohesion Policy has a significant impact on GDP, in particular in the Member States which are the main beneficiaries of the policy.

Chapter 7


• Cohesion Policy will significantly boost GDP per head in less developed regions

• The impact over time will spread to main trade partners

• Better core TEN-T network strengthens market integration and specialisation.

Chapter 8


Chapter 8


Conclusions

• Real challenges• Regional economic disparities• Increasing unemployment, poverty and exclusion

• Real impact• Growth and jobs, innovation, networks,

sustainable development• Real change

• Linked to Europe 2020 and the European Semester

• Concentrated on EU priorities

Documents

Investments for growth & jobs Promoting development and good governance in EU regions and cities