What is the cohesion policy?
According
to the European Commission website, “the Cohesion policy is a policy which aim
is to reduce disparities between the various regions and the backwardness of
the least-favored regions”. In other
words, it is based on the solidarity
principle, working in a way such that the stronger and more advanced States
finance with their budgetary surplus the least-favored States (So the more
prosperous States give more money than they receive and the weaker receive more
than they give)
How does it work and what for?
This
cohesion policy takes form by lots of different projects funded by the European
Regional Development Fund, the European Social Fund and the Cohesion Fund.
A huge
amount of money is invested each year in cohesion policies. It’s estimated that
between 2014 and 2020, €351.8 billion will be used in cohesion policy measures,
around a third of the total budget of the European Union.
That amount
of money is not divided equally through the 28 members of the European Union.
The
European Commission website says that “More
than half of the budget – €182.2 billion – has been set aside for less
developed regions, which have a GDP of less than 75 % of the EU-27
average. €35 billion has been allocated to transition regions, which have a GDP
of between 75 % and 90 % of the EU average, and €54 billion to more
developed regions with a GDP of more than 90 % of the EU average”.
The
process of selecting projects for financing is done by national and regional
authorities which have been already assigned to manage the programs to
implement cohesion policies from 2014 to 2020.
For
managing those programs and be able to compare statistics between the regions,
the EU devised the NUTS system, which divides the whole territory of Europe
into statistical units, the NUTS, each of which is assigned a number indicating
its level of development. For instance, all “NUTS 2 level” are poorly developed
regions susceptible of receive funds.
Public
bodies, businesses, associations and individuals are potential recipients of
these funds, also foreign firms with a base in Europe.
There
are 11 thematic objectives in which the cohesion policy funds are centered in,
the objectives are research and innovation, environment and sustainable growth,
transport, employment, support for SMEs, public administration, training and
education in order to produce human capital and societal challenges such as
living conditions, migration and refugees. Through these objectives, the
cohesion policy makes the goals of Europe 2020 achievable, which include
objectives of employment, research and development, climate change and energy,
education and poverty and social exclusion. This leads us to the background
relevance of this policy, which is having a positive impact over citizens lives
that makes the difference between the existence of the EU and its
disappearance. In order to fulfill the purposes it was created for, it needs to
achieve these European goals, as they are the reasons why the EU exists. So
here a matter of legitimacy is under debate. In order to be legitimate, the EU
must comply the goals it has been created for (which can be basically summed up
into improving its citizens lives) and for that it is crucial that the cohesion
policy succeeds, as it is the EU´s main tool to reach those objectives.
This
last point is even more relevant nowadays in a context of growing populism
which menaces the continuity of the EU. The EU must succeed therefore with the
cohesion policy to maintain the citizens trust and survive.
To do
so, it is necessary to have coherence with the other instruments and policies
used by the EU, such as the Investment Plan for Europe, which only benefits the
15 richest countries. It is also quite relevant to improve internal convergence
of the cohesion policy itself, because in the end of the day it benefits the
poorer countries and, indirectly, the richer (as they recover their investment
through an increase in exports to those poorer countries) leaving behind the
average regions like Dutch provinces or Poland.
A glance to the future of the cohesion policy
So far, all
the empirical analyses carried out within the academic frame proof that,
broadly speaking, the Cohesion Policy has been a story of success, contributing
in a decisive way to the development and enhancement of the living conditions
in the areas which have benefited from it. However, the work isn´t finished
yet, and there is still a lot to be done. The convergence between all the
European states still far away, delayed even more by the economic crisis, and
the use of a common currency, the euro, doesn´t seem to have contributed to
reduce disparities between the countries where it was adopted. It must be said
too that in some cases (like in Spain) it has contributed to mask some of the
endogenous structural problems of the States, using the funds to avoid facing
them, leaving those questions pending of a solution.
Also, in our continuously changing world, its
aims and the results´ measurement criteria must be revised, evolving the
traditional approach considering just GDP growth into a wider scope one which
takes into account other relevant factors such as innovation, digitalization,
technological development, increase in R+D, building up of strategic
infrastructure regarding transport, communications and access to the internet,
increases in entrepreneurship activity, productivity, employment, access to
education and healthcare....
A case of CP´s success: The case of Spain
Spain has
been one of the main beneficiaries of the cohesion policy, constituting this a
key factor for its economic and social transformation towards modernization and
convergence with the rest of Europe, but also contributed decisively to
minimize the impact of the 2008´s crisis. Spain has received the largest amount
of funds (200 000 million between 1989 and 2020) what has boosted Spanish GDP
growth (when it received 25% of the total funds it grew a 1% higher, and
currently it grows a 0.3% higher receiving a 8% of the total funds) and public
investment (rising even more during the crisis, from 9% in 2010 to 27% in 2013)
This
development has improved the convergence of Spain, proving a success for the
cohesion policy, and making needless that Spain keeps on receiving so many
funds, so Spain has started to progressively receive less cohesion funds as it
improves its situation, so other more needed States shall receive them instead,
until a future moment in which Spain sums to the contributing States and
abandons definitively the position of receiving State. For instance, in the
period 2014-2020 it will receive 28 600 million (just an 8% of the funds while
it used to receive more than the 20%)
In addition, the use of those funds has also
changed, from the initial investment in infrastructures to new specific
priorities for the current period: in human capital (through education and
training) to improve labour market participation, productivity and social
inclusion, in the evolution of the productive model to a greater added value
one (stimulating entrepreneurship and SMEs competitiveness), in promoting an
innovation-friendly business environment favorable for R+D, and in making a
more efficient and sustainable use of natural resources.
Let’s now
end up giving some real data about the impacts cohesion policy has had already
and will have in the coming years:
From 2007
to 2013, around 35 billion € were invested by the Cohesion policies in Spain. According
to the European Commission website it has helped to achieve results such as:
· create around 58 000 jobs(most of
these in SMEs);
· support over 43000 small businesses;
· co-finance almost 30000 RTD
projects;
· extend access to broadband to 1.3million
more people;
· serve 1.7 million people by water
projects and over 2.2 million from improved waste water management systems.
And also
add to the list some successful projects like the ERDF projects (Science and
Technology Park of Extremadura or the Revitalisation of the neighbourhood of
Espíritu Santo in Murcia) or the ESF projects like the PCPI project for giving
youth a chance to access labor market.
Anyway, the
future doesn´t seem less brilliant. In word of the European Comission: “In
2014-2020, Spain will manage 22 operational programmes with funding from the
European Regional Development Fund (ERDF) ─ one for each of the nineteen
regions plus 3 national programmes ─ and 23 operational programmes with funding
from the European Social Fund (ESF) ─ one for each of the nineteen regions plus
4 national programmes.” Between all of them Spain has been allocated a total of
28.6 billion that will be used as follows:
- € 2 billion for less developed
regions (Extremadura)
- € 13.4 billion for transition
regions (Andalucía, Canarias, Castilla-La Mancha, Melilla and Murcia)
- € 11 billion for more developed
regions (Aragón, Asturias, Baleares, Cantabria, Castilla y León,
Cataluña, Ceuta, Comunidad Valenciana, Galicia, La Rioja, Madrid, Navarra,
País Vasco)
- € 643 million for European
Territorial Cooperation
- € 484.1 million special allocation
for the outermost regions
- € 943.5 million for the Youth
Employment Initiative
“In total,
the ESF in Spain accounts for 7.6 billion €, which means 28.1% of the total
Cohesion Policy (ERDF+ESF) allocation.”
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