“This is an important moment for European economic, social and political cohesion, a moment of change. Of political transformation, because we are facing an important European election, but we also have to respond to climate change, demographic challenges, and digital transition now,” said Elisa Ferreira, Commissioner for Cohesion and Reforms of the European Commission, in her speech at the 9th Cohesion Forum in Brussels.
Ferreira, on the other hand, although he signaled the transformation of the system, he first cited anecdotes from his recent discussions with Ukrainian and Moldovan representatives, highlighting the strong influence of European cooperation. He also quoted the Ukrainian Deputy Prime Minister as saying:
You, Europe, give us hope, so we continue day by day.
According to the EU Commissioner for Development Policy, all this shows the importance of the “European project”, which is a beacon of hope and solidarity in difficult times. This thought accompanied his speech throughout, confirming the close connection between cohesion policy and the overall ideas of the European Union.
Building on historical perspectives, Ferreira referred to a statement by EU founder Jacques Delors, according to which
the cohesion policy must be strengthened at the turning points in the trajectory of the European project.
In this regard, he stated that “every time the European project or the big expansions took place, we had to change the catch-up policy”. In this context, he first examined the role of cohesion funds in response to crises, and called it convincing evidence that while the less developed countries of the EU had 10-11 years from the crisis of 2008-2009 to work off the GDP loss caused by the recession,
until then, this was only two years after the coronavirus epidemic, while these countries were also much more resistant to the disturbances caused by the energy crisis and the war.
“Cohesion policy is often the greatest source of stability in times of crisis,” emphasized Ferreira, who cited macro statistics to prove how effective cohesion policy has proven to be in recent years, focusing on promoting economic growth, reducing regional disparities and creating employment opportunities. for the role it played throughout Europe.
He pointed out that while in 2004 the states of the ten enlargements, including Hungary, were barely 52 percent of EU development, they have now caught up to an average of 80 percent, and their unemployment rate has dropped to 4 percent by 2023, compared to 13 nearly 20 years earlier. percent.
He also said that EU catch-up funds account for 13 percent of government investments in the entire EU,
while this ratio in emerging countries – including Hungary – was already 45-51 percent on average last year.
It’s nice, but there are also failures
Based on the part of his speech so far, the cohesion policy seems to be a success story, however, as we have presented in several of our articles on Portfolio, the large national averages are deceptive: the backwardness of certain regions has increased in more than one case over the past 20 years or so. In addition, the European Union – as during the last major cohesion policy reform – is preparing to expand once again with the inclusion of Ukraine, Moldova, Bosnia-Herzegovina and possibly Georgia.
It is for this reason that Elisa Ferreira urges reform so that catching up in the EU can be more effective.
At the forum, he argued for the development of new implementation methods and investment tools, emphasizing the importance of adapting the methods to specific regional needs, while maintaining a long-term development perspective. Among the existing challenges, he mentioned that there are more and more regions that have fallen into a growth trap: in other words, GDP growth has already lagged behind the national average.
According to the expert of the European Commission, the reason for this is that innovation has fallen behind in many areas, there is continuous brain drain and infrastructure development has not responded to real needs or future development.
He emphasized the importance of administrative capacity and the quality of institutional and public services in promoting the effective implementation of policies at the local level. He sees that “a coordinated approach in different policy areas is necessary to ensure holistic and inclusive development”.
But what does the cohesion policy reform mean in practice?
The Commissioner of the European Commission told Portfolio that the reform draft is still waiting to be developed, and that the EU institutional system still has plenty of time to do so, because there is still a lot of time left until the 2028-2034 seven-year financing cycle. Enrico Letta, president of the Jacques Delors Institute and former Italian prime minister, is expected to present his plan for the reform of the internal market to the member states next week before the extraordinary EU summit.
In response to our paper’s suggestion that, in the case of cohesion subsidies, critics are increasingly saying that instead of (or in addition to) the current approach focused on the regional level, a distribution system based on the involvement of smaller local governments should be switched to, the commissioner gave a partly agreeing answer .
“The effectiveness of European legislation depends more on different national interpretations than on the legislation itself. This interpretation takes place at national, regional and local levels, which affects the effectiveness of policies. The subsidies should flow from Brussels to the Member States, the regions and the municipalities, with the aim that the final beneficiaries of the funding also benefit from it, but this is how it works now,” answered Ferreira, who said that the simplification should focus on performance indicators that
which are measurable and achievable and which may require reforms at different administrative levels.
He sees that while some goals are easier to achieve centrally, others may require regional or local measures.
In response to another question, he explained in detail that decentralization or capacity expansion at the regional level can be considered beneficial in terms of facilitating the implementation of financing where the measures take place. He emphasized the importance of a place-based, long-term development approach involving local and regional partners.
This is in contrast to emergency measures or cyclical economic policies, which may lack these elements
said the commissioner.
Defending the system, regarding the distribution of the current cohesion funds, Ferreira explained that the regions with greater development needs are still prioritized for funding, but the developed regions also receive support, albeit to a lesser extent. During negotiations with member states, such as Hungary, the use of funds between different regions is discussed in detail already when the partnership agreements are concluded. Even during the seven-year budget cycles, there is constant consultation on the definition of development goals, but the follow-up is not yet efficient enough.
In relation to the enlargement of the European Union, he argues for the strengthening of cohesion policy and suggests that, in addition to the current 1% GNI-based contribution, the creation of a stronger EU budget should be considered, possibly with different instruments, such as new joint borrowing – such as NextGenerationEU, the recovery in the case of a basic credit rate. But even reprioritization or increasing EU revenues can be a good tool.
Cover image source: EU
2024-04-12 08:00:00
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