Europolitics Monthly (English)

Should Structural Fund support be tied to compliance with the EU’s Stability and Growth Pact? This will doubtless be one of the questions debated at length in the coming months, ahead of the European Commission’s presentation of its new proposals for post-2013 cohesion policy. The Commission proposed, in late 2010, to suspend or cancel Structural Fund support when states fail to respect the pact. This idea prompted lots of sceptical comments at the two-day Cohesion Forum, held in Brussels on 31 January and 1 February. At the forum’s closing session, which brought together the Committee of the Regions (CoR), the European Parliament and representatives of the German, Swedish and Spanish governments, Germany alone supported the idea. For Peter Hintze, German state secretary for the economy, the possibility of suspending or cancelling Structural Fund interventions in cases of non-compliance with the pact is a condition for success. « I think that without stability criteria, all policies are condemned to failure, » he said, adding that this type of sanction could have « a prevention effect […] to keep from falling further […] to be viewed as a safety net ».
Yet Germany is alone against all the others. Anna-Karin Hatt, Swedish minister for regional affairs, does not reject « a degree of conditionality in cohesion policy, » but has « doubts » about the tie-up with the pact. Luis Espadas, Spanish general secretary for the budget, argues that « patients shouldn’t be kicked ». « Imposing financial penalties on countries that are already in a serious economic situation is not likely to work, » he said.
The European Parliament and the CoR reacted unanimously in the same vein. For Danuta Hübner, chair of the EP’s Committee on Regional Development (REGI), there is not even a legal basis for such a measure. Fellow MEP Pervenche Berès, chair of the Committee on Employment and Social Affairs (EMPL), voiced strong opposition to the Commission’s idea. Considering the different amounts the states receive, « the fine would be proportional to the degree of poverty, which is something of a paradox, » she stated. Mercedes Bresso, president of the CoR, stressed the « risk of penalising regions and municipalities, but they’re not responsible for member states’ failure to fulfil their obligations ».

INTERMEDIATE REGIONS?
Another subject that is certain to spark ample discussion in the coming months is the fate of the so-called transition regions. Should an intermediate category of regions be created (with GDP per capita of between 75% and 90% or 100% of the EU average) to replace the existing phasing-in and phasing-out mechanisms? The Commission considers this possibility in its  Fifth report on economic, social and territorial cohesion’. Lobbying activity was intense in the wings of the forum. Seven French regions concerned (Lower Normandy, Corsica, Languedoc-Roussillon, Limousin, Lorraine, Nord-Pas de Calais and Picardy) submitted a joint statement to Regional Policy Commissioner Johannes Hahn expressing support for this intermediate category and opposing its being reserved to regions moving out of the convergence objective (ie regions with GDP per capita of just above 75% of the EU average).
However, unanimity is absent on this idea too. Hintze voiced doubts for Germany. Yes, Germany supports a gradual phase-out for regions emerging from convergence, but the « impact » of creating an intermediate category would have to be studied. In principle, the German state secretary is opposed to extending the system to all regions with GDP of 75% to 90% of the EU average. « There is a problem of resources, » said Hintze. Ditto for Sweden: « If we propose a transition scheme, it will have to be limited, » commented Hatt. She added that Sweden is « relatively opposed to the creation of a new category of regions ». The Spanish reaction was more favourable. Espadas called for a transition mechanism, referring at least twice to the « problems » created from the existence of the phasing-in and phasing-out categories.
A POLICY FOR ALL
Broad consensus emerged on the idea of not reserving Structural Fund interventions to less developed regions alone. Cohesion is a policy for all. Here, too, though, Sweden qualified its support, which corresponds to its usual position. « Resources are going to become scarce and we need to prepare for this, » warned Hatt. The Swedish representative did not reject the idea of involving all regions but stressed that the accent should be on regions « most in need ». The German view was unambiguous: Hintze stated clearly that all regions should be concerned because « that allows all citizens to endorse this policy ». The Spanish representative stressed the need to involve the competitive regions « because cohesion is not just a policy of redistribution ». « This is not just aid, it is financing » for all regions to implement the priorities of the  Europe 2020′ strategy, said Espadas.
The French regions were pleased to have received assurance from a representative of the French government during the final debate, who stated that France « seeks a cohesion policy that benefits all regions and all territories ». A few minutes earlier, they had voiced concerns in connection with comments by Bruno Le Maire, the French minister with responsibility for regional policy and agriculture. Le Maire recently said that regions that have attained the average level of EU development no longer needed EU funding.

BYLINE: Isabelle Smets