CPMR REACTION TO THE DRAFTS OF THE FRAMEWORK REGULATION AND THE REGULATIONS PROPOSED BY THE EUROPEAN COMMISSION ON 14TH JULY 2004

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1 CONFERENCE DES REGIONS PERIPHERIQUES MARITIMES D EUROPE CONFERENCE OF PERIPHERAL MARITIME REGIONS OF EUROPE 6, rue Saint-Martin RENNES - F Tel.: + 33 (0) Fax: + 33 (0) e.mail: secretariat@crpm.org web: 23 JULY 2004 TECHNICAL NOTE FROM THE CPMR GENERAL SECRETARIAT CPMR REACTION TO THE DRAFTS OF THE FRAMEWORK REGULATION AND THE REGULATIONS PROPOSED BY THE EUROPEAN COMMISSION ON 14TH JULY 2004 I. DRAFT REGULATIONS FROM THE COUNCIL ESTABLISHING GENERAL CONDITIONS FOR THE EUROPEAN REGIONAL DEVELOPMENT FUND, THE EUROPEAN SOCIAL FUND AND THE COHESION FUND 1 The CPMR would firstly like to congratulate the European Commission for the spirit in which these regulations have been drafted. They comply with the general outline of the Third Report on economic and social cohesion and the contents of the financial perspectives published on 10th February 2004, confirmed in detail on 14th July In particular, the CPMR applauds the main strategic guidelines contained in the summary of motives, the evident desire to make an effective contribution, through these regulations, to the aim of balanced competitiveness across the continent and the general architecture of the future cohesion policy after The CPMR would like underline the following points: - Article 3 proposes equitable strategic cover of the European territory by taking account of various regional problems (convergence regional competition specific geographical situations); - Article 4 confirms the effort at simplification between objectives and funds. It is to be hoped that the principle of a single fund may become acceptable over the lifetime of the next programme; - Article 5 validates the relevance of the eligibility criterion to 75% of the EU average while taking measures that are fair for ultraperipheral regions and regions undergoing statistical and mechanical phasing out; - The CRPM is also delighted with the contents of Article 7 on cooperation and applauds the Commission s desire to lay down future limits for transnational cooperation. It hopes to be consulted on the question given the experience gained in this matter by its member regions and Geographical Commissions; - The CRPM wishes to emphasise its agreement on the revised draft of the principle of partnership included in Article 10, in particular on the Commission s expressed determination to ensure that Member States involve the regions in the various stages of programming, especially when drafting a national strategic reference framework; - With regard to budgetary proposals, the CPMR is not surprised by the proposed overall amount of billion euros for the structural policy and hopes that this amount will remain unchanged after negotiations. It is also in favour of the division of funds among the various objectives, seeing this proposal as an acceptable compromise. It is highly satisfied with the criteria used for the distribution of regional budgets for the three objectives, especially those relating to the regional competition and and the Regulations proposed by the European Commission on 14th July 2004 p. 1

2 employment objective. For the first time, this distribution should be generally equitable and it will favour regions which are faced with proportionally more difficulties; - With regard to the strategic approach to cohesion, the CPMR would like to congratulate the European Commission for the ambitious architecture it is proposing, especially the design of strategic guidelines at Community level followed by a customisation within each national strategy. It calls on Member States to uphold the principles of Article 10 on partnerships by involving their regions closely in this preparatory stage; - The CPMR notes point 2 of Article 34, which does not encourage Member States to implement the ESF at NUTS 2 level. It nevertheless hopes that the Member States will make increasing use of this solution in order to reflect regional realities more closely as far as employment is concerned; - With regard to Community reserves on quality and effectiveness, the CPMR considers the criteria proposed by the Commission to be totally relevant as far as the regional competition and employment objective is concerned (% devoted to innovation in the programmes). It is more sceptical as regards the GDP growth criterion retained for the convergence objective; - The CPMR is also satisfied with the conditions on national contingency reserves. At a later stage, it would like the Commission to specify the criteria to be applied to the allocation of this budget given the size of the sums concerned (1% of the convergence budget and 3% of the regional competition and employment budget); - With regard to financial participation on the part of the funds, the CPMR is satisfied with the general criteria used to adjust levels of participation. It would however like to emphasise the relevance of the scheduled increases: +5% for territories subject to permanent constraints, +10% for interregional cooperation projects, +10% for the ESF within the framework of interregional and transnational cooperation; - Finally, the CPMR is satisfied with all the measures aimed at greater simplification in the management, monitoring and control of funds, being aware of the legal constraints on greater innovation in this respect. II. OTHER REGULATIONS: ERDF, COOPERATION, EAFRD, EFF AND TRANSPORT II.1 ERDF REGULATIONS THAT REFLECT THE REAL ISSUES 2 The CPMR is satisfied with both the structure and the contents of the eligibility measures proposed within the framework of the draft ERDF regulations. It also notes the European Commission s willingness to accept the territorial dimension of cohesion, a feature which is seen in ad hoc approaches to territories faced with very specific problems (ultraperipheral regions, zones with very low population density, islands and mountainous regions, zones dependent on fishing, urban and rural areas). It also applauds the confirmation of the importance given in general terms to territorial cooperation. As far as the nature of eligibility measures is concerned, the CPMR would like to emphasise the special relevance of the following proposals: - The marked priority given to measures relating to research and innovation both for the convergence objective and for the regional competition and employment objective. In this respect, the CPMR invites Member States to carefully consider the necessary balance between European approaches to fundamental research and regional approaches in favour of the fabric of innovation, since each approach complements the other; - The marked attention to problems of sustainable development, through environmental measures, transport, energy or risk management; - The attention to problems of accessibility, including accessibility to digital networks, within the framework of the regional competition and employment objective. This is a major innovation compared to the present period. and the Regulations proposed by the European Commission on 14th July 2004 p. 2

3 The CPMR also notes the relevance of extending the concept of development to include the urban dimension since this gives priority to partnerships between regional and urban authorities for the purposes of common objectives. It warns Member States against using such an approach without closely involving regional authorities, in an effort to fund only national measures. With regard to territorial cooperation (cf. below for further details), it is appropriate at this stage to express a hope that the disappearance of national budgets will lead to much greater investment from public stakeholders in transnational cooperation. II.2 EUROPEAN TERRITORIAL COOPERATION NOW HAS A STATUS AND SIGNIFICANT BUDGETS 3 The CPMR is delighted at the confirmation of the proposals included in the report on cohesion to raise territorial cooperation to the third objective in cohesion policy and the translation of these proposals in budgetary terms: 3.94% of the cohesion budget will be given to territorial cooperation i.e billion euros for , compared to 4.9 billion for Interreg 3, in the period between This third objective aims to strengthen cooperation on a cross-border level through joint local initiatives and on a transnational level by actions that bring structure to the territory and are linked to the Community s priorities. Cooperation will gain further strength by networking and exchanging experience at the appropriate territorial level. Stronger transnational cooperation and maritime cooperation The distribution of resources within this objective is as follows: % for cross-border cooperation including 12.12% for the ERDF s contribution to the funding of the European neighbourhood and pre-membership instruments; % for cross-border cooperation using the eligible population as a criterion on which to calculate the breakdown per Member State; % for networks. The funding for transnational cooperation has more than tripled in the new budget guidelines to a new figure of 6.3 billion euros. The areas proposed are also relevant, and linked to the Lisbon and Göteborg strategies. They include questions of accessibility which are of particular importance for the regions within the CPMR i.e. shipping routes, airline services and intermodality. The CPMR is also delighted to note the eligibility of maritime borders for cross-border cooperation in conditions that are less restrictive than at the present time applying to regions that are separated by up to 150 km of sea. What is the future for theme-based interregional cooperation? The draft regulations would remove strand C of Interreg 3 which encourages interregional theme-based cooperation independently of geographical proximity. Moreover, the regions that have obtained ERDF funding for the purposes of the convergence and competitiveness objectives will be encouraged to dedicate part of it to international cooperation with at least one region in another Member State. This will give them a bonus of 10%. The CPMR notes these proposals from the Commission, while hoping that the new system will be simple and accessible. It considers that Interreg 3C is relevant as far as its objectives are concerned but difficult to use because of an excessively complex administrative setup. It also hopes that the networks to be put in place by the Commission will be based on recommendations from interregional organisations and set up in partnership with these same organisations. The discontinuation of Interreg 3C should not lead to a reduction in the capacity for interregional initiatives. and the Regulations proposed by the European Commission on 14th July 2004 p. 3

4 A new legal instrument for territorial cooperation Introduced by Article 18 of the ERDF regulations, the European grouping of cross-border cooperation (EGCC) is the subject of a specific proposal within the regulations. The new, long-awaited legal instrument should allow it to be given the responsibility for the management of an operational programme and to take on the additional responsibility of management and the corresponding technical secretariat. The CPMR will take the time required to examine this timely proposal in detail, with the Committee of the Regions, the other interregional organisations and, in particular, the Association of European Border Regions (AEBR). It has, however, already been noted that, since the instruction addresses transnational as well as cross-border cooperation programmes, its name should be reviewed to reflect its generic character and possibly changed to European territorial cooperation group? A seminar to consider points and prepare implementation The arrangements for the implementation of this third objective will be covered in the European Commission guidelines scheduled for publication in In the meantime, working closely with AEBR and other interregional organisations, the CPMR will hold a seminar in Sicily on 21st and 22nd October 2004 to study the future of territorial cooperation. The various elements in the third objective will be discussed from the strategic, programming and legal points of view (EGCC). For the CPMR, this will be an opportunity to discuss the boundaries of transnational cooperation for II.3 EAFRD, AN AGRICULTURAL RATHER THAN A RURAL DEVELOPMENT FUND 4 The new European Agricultural Fund for Rural Development, set up to bring a whole series of EU rural development projects together under one umbrella, has not led to any major changes in the priorities selected or the measures required to implement these priorities. In budgetary terms, it enjoys a surplus generated by the adjustments to direct aids which freed up 7 billion euros i.e. 7% of the budget for the second phase scheduled for the 2007/2013 period. Given the extension of the EU ( ), there has been a noticeable reduction in Community credits in real terms. The new regulations have resulted in a clearer presentation of the range of eligibility measures which are now structured under three headings: - Increased competitiveness for farming and forestry; - Environment and land management; - Improvement to the quality of life and diversification of farmers, including diversification into nonfarming activities. The CPMR notes the agricultural orientation of the EAFRD and regrets that the new Fund does not state its purpose clearly in its name: why not call it an Agricultural Development and Reconversion Fund? The CPMR questions the appropriateness of maintaining Axis 4 relating to the integration of the EU Leader initiative. It wonders whether it would not be preferable to include measures to encourage the nonagricultural development of rural areas in the future convergence and regional competitiveness objectives since they relate to regional development rather than a sector-based development. In fact, this is one of the main conclusions from the seminar on rural development organised by the CPMR on 30th April 2004 in Florence. The implementation and viability of such a move would however require the transfer of credit from rural development to cohesion. and the Regulations proposed by the European Commission on 14th July 2004 p. 4

5 EAFRD governance requiring clarification In its Article 41, the present regulations on rural development (1257/1999) state that Rural development plans shall be drawn up at the geographical level deemed to be the most appropriate. They shall be prepared by the competent authorities designated by the Member State and submitted by the Member State to the Commission after competent authorities and organisations have been consulted at the appropriate territorial level. One of the main conclusions of the seminar organised by the CPMR on 30th April 2004 in Florence concerned the advances required with regard to the place of regions in rural development plans. The signature of the Constitutional Treaty is coming closer and, with the advances that it will instigate in this respect, it is no longer acceptable for centralised States to take sole control of the implementation of this Community policy when it has such a strong territorial component. Two articles from the draft EAFRD regulations deal with these questions: - Article 6, Partnership, states that The partnership shall be conducted (by the States) with due regard to the respective institutional, legal and financial responsibilities of each category of partner - Article 14, Rural Development Programmes, paragraph 2: A Member State may submit either a single programme for its entire territory or a programme for each region. Progress might have been expected at regional level but, if these conditions were applied, they could lead to a form of recentralisation. By leaving the States no intermediate solution midway between a single national plan and a set of regional plans, the States may opt for a national Plan, even though their current plans are partly regionalised. This would represent a step backwards, although it is undoubtedly an unwanted side effect of the Commission s determination to move towards greater regionalisation rather than a deliberate attempt at recentralisation. Rationalising compensation for natural disadvantages and the need to assess the occurrence of such disadvantages Now that the EAFRD has been set up, the Commission proposes to review the system of compensation payments for farmers in disadvantaged and less privileged areas. This decision follows on from the criticisms levelled by the European Court of Auditors which concluded that there was a need for rationalisation, and from a series of assessment reports which focussed mainly on the definition of mountainous areas. The CPMR has not yet examined the likely consequences of a change in the system for the Regions. At first sight, mountainous areas would appear to enjoy particular benefit. As to island areas, they are not mentioned per se. In fact, first reactions from a certain number of Member States seem to be unfavourable because of this. Quite apart from the impact on farmers in peripheral maritime regions, it is useful to see how each Member State will put Community regulations into effect given the extensive room for manœuvre left for individual States. It is also useful to see what say, if any, the Regions concerned will have with regard to these choices of implementation. II.4 EUROPEAN FISHERIES FUND (EFF) 5 The CPMR is delighted that a specific fishing fund is being maintained for the period but doubts that the amounts allocated to it will be sufficient to cope with the sector s increasing problems since the budget announced is of the order of 700 million euros p.a. The changes in this sector, which are essential in order to maintain fish stocks, will imply major on-going efforts and measures will have to be taken to cope with them. Generally speaking, the CPMR agrees with the objectives and contents of the future EFF, especially in its support for the CFP by creating the requisite conditions of economic, environmental and social sustainability, improving quality of life in coastal areas, strengthening the competitiveness of operating and the Regulations proposed by the European Commission on 14th July 2004 p. 5

6 structures and the development of economically viable companies and encouraging the protection of the environment and natural resources. It is in favour of the guidelines aimed at the implementation of an integrated approach since they correspond to a form of territorial development of which the CPMR has always been an ardent supporter. However, it is unsure of the means by which these guidelines will be implemented, especially as regards the general organisation designed to establish strategies and operational programmes. Given the current proposals, it considers that partnership and consultation with regional authorities remain unclear and do not sufficiently guarantee the involvement of the Regions. With regard to the priority given to sustainable development in coastal fishing zones (and without giving any final pronouncement on the fundamental question at the present time), the CPMR has doubts about the proposal for the creation of Coastal Action Groups (CAG). This would increase the number of agencies involved and might overlap the regional development strategies implemented by the structural funds. Before giving its final opinion on this question, the CPMR has asked for further information on the interconnection between these regional development strategies and the future CAG. Likewise, there is a need to define the complementary nature of this proposal and the implementation of the European strategy for integrated management in coastal areas and the consistency between them. Finally, the CPMR wishes to draw the attention of the Commission and Council to the need to inform professionals working in this sector and, more widely, all economic and social stakeholders in the coastal areas. Because they are regularly faced with the need to adjust to modifications in the rules applied to them, they eventually find it impossible to understand the basis for certain action. II.5 TRANSPORT REGULATIONS: A SPECTACULAR INCREASE IN COMMUNITY BUDGETS WHICH MUST NOT BE IMPLEMENTED TO THE DETRIMENT OF TERRITORIAL COHESION 6,7 The Commission proposes to multiply by 5 the budget devoted to the Trans-European Transport Network. From 4.17 billion euros for the period, it is set to rise to billion for the period between 2007 and The budget set aside for the Marco Polo programme is also likely to be reassessed in similar proportion, rising from 75 million euros in to 740 million euros for The aim of this programme is to encourage a changeover from road haulage to less polluting methods of transport. In terms of an initial, purely financial, analysis, the CPMR has to be happy with this increase in Community funding since it will help to improve the accessibility of the Regions. However, there are a few points which should be remembered and which temper this initial reaction: - These funds are allocated on the basis of criteria which do not, at the outset at least, give priority to cohesion or territorial balance. The top priorities of the Community s TEN-T policy are an improvement to traffic flows and the absorption of bottlenecks, especially in border areas, with a view to maximising the workings of the domestic market; - It is true that the cohesion policy also finances transport infrastructures, with additional priorities. And the new objectives of convergence and competitiveness do take account of the need to improve accessibility. However, the budgetary decisions of the forthcoming semesters should not rob Peter to pay Paul, ignoring the competitiveness objective in order to increase funding for the TEN-T. This would constitute a step backwards for peripheral and maritime regions; - The current governance of the TEN-T is not satisfactory for regional authorities since priority infrastructures are actually selected by Ministers of Transport and the European Parliament. Inversely, the regions provide their full backing and support for the cohesion policy. TEN-T: co-funding rates conveniently revised upwards In its draft for the new financial regulations for the TEN-T, the Commission offers rates of co-funding that are much more attractive. At present, the maximum rate is 20% and this is only accessible for cross-border and the Regulations proposed by the European Commission on 14th July 2004 p. 6

7 infrastructures or systems which cross natural geographical barriers. The maximum rate is set to rise to 30% or even 50% for cross-border areas, on condition that the work begins before The CPMR has always contested the rates of co-funding for the TEN-T, which have been inadequate since 1996 and which do not even produce a lever effect or make it possible to mobilise other sources of funding. It is therefore pleased to see this proposal but it requests that preferential rates should not be reserved for terrestrial infrastructures. Instead, they should be extended to maritime and port investments. Moreover, it hopes that this increase in rates will not be rejected by another veto on the part of Ministers of Economy and Finance sitting on the Ecofin Council. TEN-T: priority criteria which raise questions The TEN-T budget seems to be focusing on two groups of projects: - of the 30 priority projects listed on 29th April 2004, particular attention seems to be have been paid to those which contribute to the completion of the Single Market and the changeover to modes of transport that are more environmentally friendly; - other projects in the common interest, in particular management systems for rail, air and maritime transport. It is clear that improved accessibility is not one of the priority criteria. Moreover, it would seem that investments in ports, although eligible for TEN-T since 2001, are not the focus of any special attention. A TEN-T budget multiplied by 5 but which does not pay greater attention to accessibility and maritime investment would not be acceptable to the CPMR. On the contrary, it would reveal a wish to prioritise Central Europe, especially the terrestrial border regions of Central Europe. TEN-T: the Regions forgotten in its implementation The draft regulations drawn up by the Commission show a marked centralising focus. They do not allow the Regions to make any progress towards governance of the TEN-T as is evident from the following extracts: - The implementation of the projects is in the first place the responsibility of the Member States who adopt their own institutional approach ; - In particular, the new TEN Regulation- although maintaining the key role of the Commission in the final selection of projects- proposes to allocate a major role to the Member States in relation to technical controls and the certification of costs. Marco Polo at the service of the motorways of the sea In its draft regulations for Marco Polo II, the Commission proposed to extend the programme to include EU neighbour countries. The CPMR is totally in agreement with this. Moreover, the Commission integrated support for the setting up of the motorways of the sea into Marco Polo. These motorways have already been an integral part of the TEN-T since April 2004: - Of the 740 million euros proposed for Marco Polo, 287 million would be used for the motorways of the sea, funding 38 projects between 2007 and 2013; - The maximum duration of Community support would be extended to 5 years and the maximum level of co-funding would be increased to 35%, a significant advance compared to the current conditions (30% for 38 months). This was one of the CPMR s demands ; - Greater flexibility has been introduced with regard to the funding of auxiliary infrastructures; - The possibility of cumulating this with other sources of public funding (regional, national, EU) up to a cumulative total of 50%. This also meets the wishes expressed by the CPMR and its Regions at meetings organised by the Conference early in 2004 on the topic of the motorways of the sea, in the Atlantic, Mediterranean, North Sea and Baltic Sea. and the Regulations proposed by the European Commission on 14th July 2004 p. 7

8 Beside these encouraging factors, there are two levels of uncertainty: - Again, the probably unfavourable reaction of certain States to these increases in the level of Community co-funding; - More fundamentally, the concept as presented in the draft regulations is based on very high volume, high-frequency services linked to terrestrial infrastructures other than roads. It is almost certain that these are criteria on which the developed maritime Regions in the North-West of Europe, in the Northern Range, have a head start. The level of provision required in order to take advantage of the title motorway of the sea and, therefore, of the funding that accompanies the granting of this title must not discriminate against zones in which current and potential maritime traffic is lower in volume. From the CPMR s point of view, the purposeful start-up of a service between a harbour in Portugal and an Irish port, for example, is probably more deserving of encouragement than a link with a high volume of traffic between two major ports in the Northern Range. In other words, it will no doubt be appropriate to review the draft regulations drawn up by the Commission to give them a basis that conforms more closely to the territorial development concept which should also form the relevant guideline for a motorway of the sea. References: 1 COM (2004) 492 final of 14/07/ COM (2004) 495 final of 14/07/ COM (2004) 496 final of 14/07/ COM (2004) 490 final of 14/07/ COM (2004) 497 final of 14/07/ COM (2004) 475 final of 14/07/ COM (2004) 478 final of 14/07/2004 and the Regulations proposed by the European Commission on 14th July 2004 p. 8