Future Cohesion Policy from a Fiscal Perspective
Minister Lindner,
Mr Lehmann,
Ladies and gentlemen,
My thanks to the federal ministry of finance, for organising this event, and to the State of Baden- Württemberg for hosting.
I value contributions from different stakeholders, from academics particularly – the Future of Cohesion Policy should be informed by a wide-range of viewpoints and evidence.
This is why I started the reflection process with the high-level group on the Future of Cohesion Policy which featured scholars, practitioners and policymakers.
The final report was presented in February this year and it is an excellent reading.
The 9th Cohesion report that we published in April also contains forward looking recommendations on how the Policy can evolve.
And in parallel, I very much welcome debates at the regional and national level and the interesting contributions received, including from the German lander.
I look forward to the final position of Germany's federal government on the future of Cohesion Policy.
Allow me to thank Germany's regions for their continuous support and engagement in highlighting the merits of the policy, its importance for all territories, as even those that are economically advanced will need support to undergo the transformations underway, to stay competitive and retain their leadership role in today's turbulent geopolitical context.
Baden-Württemberg, our host today, is a very good example, given the imperative of transforming the automotive sector, embracing new sources of energy, and seizing the opportunities of the circular economy, all activities currently supported by Cohesion funds.
In my recent visit to Germany, I had the pleasure to witness the remarkable regional growth strategy that Saxony has embarked upon.
Silicon Saxony is an excellent example of combining innovation and digitisation – EU policy working at the regional level for local jobs and growth.
I've also had the pleasure, to visit Brandenburg and see the real transformation of the Lausitz toward a climate-neutral, energy independent economy, while creating future jobs and employment.
I am proud that such transformation is supported by Cohesion Policy, notably the Just Transition Fund, leveraging public and private resources to a maximum impact.
Now, turning to the report that you presented today, I will of course read it carefully, so these are just some preliminary remarks.
I welcome the renewed focus on Cohesion's Treaty-based objective of promoting convergence – indeed, during my mandate, this has been a driving factor in the policy-responses I have steered: from preventing that the multiple crises increase disparities in the EU, to gearing investments towards the needs of each region, and ensuring that sectoral policies do no harm to cohesion.
Contrary to some authors' views, Cohesion Policy is not about transfers, it's about fostering sustainable and balanced development through supply side improvements and the delivery of public goods.
It is also not about buying-in the support of some Member States, it is rather about making sure that our best asset – the single market – works properly and to the benefit of all, not just a few.
Borrowing a quote from the recent Enrico Letta's report: “An effective Cohesion Policy… has always been, and will continue to be, a key condition for the success of the single market”.
On the results of Cohesion policy, the best example is the 13 countries which joined the EU since 2004.
Back then they had an average GDP per head of just 52% of the EU average. This has now risen to 80%. The gap more than halved.
This why the World Bank described Europe as a convergence machine and Cohesion Policy as its motor.
There is also strong evidence that all of Europe benefits from Cohesion Policy.
Richer regions benefit from increased trade and more integrated supply chains.
To take just one example, macroeconomic modelling suggests that the GDP of Europe as a whole will be 1% higher as a result of the current and previous programme rounds, and each euro invested in Cohesion Policy is expected to generate 3 additional euros of GDP.
Here again, the German economy, as a large trading and industrial nation has greatly benefited from increased purchasing power in the single market.
The benefits of the single market per person in Germany largely outweigh its contribution to the EU budget.
We have evidence that the spill-over benefits for non-Cohesion countries from investments in Cohesion countries are significant, up to 45% of the impact of the Policy.
This is why I dislike the False dichotomy between net contributors and net beneficiaries.
We all stand to benefit from European integration.
Another important point from the report is the need to justify the relevance of the policy in the face of new challenges.
Cohesion Policy is indeed a feature of EU integration.
It has been present, since the Treaty of Rome to the creation of the single market, the single currency, and the several waves of enlargement.
But the rationale for Cohesion policy is more relevant than ever.
We will not be able to win the global competition against China and the US, without mobilising the strengths of every region.
We will not be able to seize the opportunities of the green and digital transition, without ensuring that this is done in a just and fair manner, and that the leveraged growth and development is anchored on the new axes of competitiveness.
And we will not be able to make the future enlargement a success without continued support for both future members, which currently stand at half of the EU GDP average, and current members which still have to deal with emerging challenges.
A fair point that is highlighted in the report, is the risk of overloading the policy with multiple objectives.
In the 2021-2027 programming cycle, we reduced the Policy objectives to five, down from more than ten, to indeed refocus interventions to where they most matter.
However, I would argue that this risk exists because Cohesion is the main investment policy in the EU's budget.
Hence, it is through Cohesion that many of the EU's Policy priorities are financed, from the Green Deal to the Digital Agenda.
This calls indeed to rethink the structure of the Budget, however, not to curtail Cohesion, but to expand the investment capacity of other policies going beyond the limitative and self-restraining 1% ceiling of the EU GDP.
I also agree with your conclusion, that to overcome existing regional divergencies we need to be even more tailor-made.
Some regions still lack basic infrastructures, this is where EU support should focus in these regions.
Other regions are at more sophisticated levels of innovation and cutting-edge technology.
Support there should be targeted to breakthrough innovations, with a higher share of loans than grants.
For example, in Germany alone, Cohesion Policy support in the 2014-20 period has created 2,700 full-time researcher jobs.
Brought the new products of 4,500 enterprises to the market.
Helped create 22,000 full-time jobs, as well as 6,000 new enterprises.
Now of course, as with any other policy we need to be constantly aware of what needs to be adapted, what are the emerging risks and challenges and where the opportunities lie.
A growing body of literature points to the development traps that some regions find themselves in with stagnating or declining economies, at different levels of development.
This is mostly associated with poor innovation ecosystems, low productivity, outdated set of skills, weak institutions and negative demographic trends.
These development traps are often linked to a geography of discontent, where those that feel left behind, consistently vote against the system they feel has neglected them.
Based on this evidence, there is a strong argument for a policy supporting all regions, as all regions face their specific challenges, while respecting the principle of proportionality and helping more those that do not have the means to support themselves.
This is why we need to retain the territorial approach to Cohesion investment, in cooperation with partners and regional stakeholders.
As pointed out by the research presented in the report, the place-based approach of Cohesion is imperative for the pursuit of its objectives for convergence.
In that sense, while the recovery and resilience facility was an excellent counter-cyclical instrument, it was a one-off temporary measure, as also acknowledged by the European Court of Auditors, and not “the new Cohesion Policy” as some presenters may suggest.
But I would also agree that investment alone is not enough.
It must be accompanied by appropriate reforms, as well as administrative capacity building.
It is indeed a paradox that the regions most in need of support struggle to take maximum advantage of it.
Your research confirms our evidence and experience, that administrative capacity and a qualified civil service are crucial for the effectiveness, and efficiency of EU investment.
An excellent example is the Technical Support Instrument, which offers much demanded, tailored-made support to public administrations in all member states, including Germany.
Ensuring support to capacity building and technical assistance, as well as reform support, are thus indeed success factors for the policy going forward.
However, the link to reforms should work more as incentives rather than sanction, take into account the regional dimension of the policy, and be in line with partnership principle.
We are also considering ways to strengthen our scientific basis, and our evaluation capacity, together with Member States and with the support of independent, expert advice.
We will remain committed to evidence-based policymaking, which is why I am here today, and why I thank all those who are working so hard on these matters.
This is crucial for our mission, that in the coming transformations, we have the best tools and the most appropriate instruments to ensure that Europe's convergence machine continues to run for every region and every citizen.
For this, let me to conclude, Cohesion Policy needs to remain well-endowed to provide the support it has successfully offered at every step in building our Union.
As Jacques Delors said, Cohesion is a pre-requisite for our Union, this is why it needs to be seen as common public good at European and Member State level.
| Zařazeno | út 16.07.2024 18:07:00 |
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| Zdroj | Evropská komise en |
| Originál | ec.europa.eu/commission/presscorner/api/documents?reference=SPEECH/24/3843&language=en |
| lang | en |
| guid | /SPEECH/24/3843/ |
