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TABLE OF CONTENTS
TITLE
PAGE
NUMBER
HOW TO USE FINANCIAL INSTRUMENTS FOR COHESION AND FOR WHICH INTERVENTIONS?
THEORY AND PRACTICE WITH A CASE STUDY ON THE SITUATION IN THE BALTIC STATES
Daina Belicka
Jorge Nez Ferrer
A MORE EFFECTIVE AND EFFICIENT POLICY? ASSESSING THE IMPLEMENTATION OF THE REFORM
OF COHESION POLICY.
Peter Berkowitz
ASSESSING FROM THE EUROPE 2020 MACRO PERSPECTIVE THE RIS3 OF THE EU 28 REGIONS
AND MEMBER STATES : KEY LESSONS AND POLICY IMPLICATIONS
Guenter Clar
10
10
11
12
13
HOW DOES THE NET IMPACT OF THE EU REGIONAL POLICY DIFFER ACROSS COUNTRIES?
Mara Giua
Riccardo Crescenzi
14
15
16
16
17
17
BUILDING RESILIENT ECONOMIES: LESSONS FROM THE CRISIS FOR EU COHESION POLICIES
Adrian Healy
Gillian Bristow
18
18
20
CHANGES IN SOCIAL COHESION IN THE MEMBER STATES OF THE EUROPEAN UNION IN CRISIS
CONDITIONS
Ireneusz Jazwinski
20
HELIX MODEL AS A TOOL FOR IMPROVED PERFORMANCE AND ACHIEVEMENTS OF THE COHESION
POLICY RESULTS
Elita Jermolajeva
Baiba Rivza
21
LINKING ESIF TO SOUND ECONOMIC GOVERNANCE, THE STORY OF A TRIPLE PUNISHMENT FOR
LOCAL AND REGIONAL AUTHORITIES
Marjorie Jouen
22
22
24
24
25
26
27
28
28
31
32
32
33
34
SUPPORTING THE RICH AND THE POLITICALLY LOYAL: HOW THE STRUCTURAL FUNDS MAY
CONTRIBUTE TO RISING REGIONAL DISPARITIES IN EASTERN EUROPE
Gergo Medve-Balint
34
COHESION POLICY AND INNOVATION: HOW CAN RESOURCES BE USED MOST EFFICIENTLY?
Jose Mella-Marquez
Asuncion Lopez
Juan C. Salazar
35
36
37
COHESION AND GROWTH: IS THE EU SYSTEM FIT TO FACE THE CHALLENGES BEYOND 2020?
Willem Molle
37
THE RISE AND FALL OF INTEGRATED APPROACHES - ON TROUBLED WATERS FROM CONCEPT TO
IMPLEMENTATION
Gbor Novotny
38
38
LINKING THE COHESION FUNDS INTO THE INTEGRATION OF YOUTH IMMIGRANTS IN THE
EUROPEAN LABOUR MARKETS
Gonul Oguz
39
THE ACHIEVEMENTS OF THE 2007-2013 COHESION POLICY IN THE BALTIC SEA REGION
Nicoleta Carmen Olteanu
39
40
40
41
42
43
44
45
46
47
48
49
50
51
51
52
53
54
54
55
56
57
BALANCING THE DEMANDS OF LOCALISM AND COMPLIANCE: SETTING UP THE NEW ERDF
PROGRAMME IN ENGLAND
Carole Sweetenham
57
58
58
59
60
61
61
62
62
63
NEW APPROACHES TO ADDRESSING YOUTH UNEMPLOYMENT: NEW ROLES FOR THE EUROPEAN
UNION'S STRUCTURAL AND INVESTMENT FUNDS?
Peter Wells
Elizabeth Sanderson
Ian Wilson
63
FINANCIAL INSTRUMENTS IN 2014-20: LEARNING FROM 2007-13 AND ADAPTING TO THE NEW
ENVIRONMENT
Fiona Wishlade
Rona Michie
64
65
65
THE BLIND LEADING THE BLIND? - COHESION POLICY AND MACROECONOMIC MODELLING
Janusz Zaleski
Zbigniew Mogia
66
SOCIAL INCLUSION FUNDED BY EUROPE? THE IMPACT OF THE EUROPEAN SOCIAL FUND ON
LOCAL SOCIAL AND EMPLOYMENT POLICIES
Katharina Zimmermann
67
68
policy programmes and projects and their effectiveness and utility over the longer term in 15 selected regions of
the EU15, from 1989 to 2012.
Based on an evaluation study conducted for the European Commission (DG Regio) and academic research, the
paper finds major differences in the reported effectiveness of Structural and Cohesion Funds. While the ERDF has
made a significant contribution to regional development, in virtually all regions the success in addressing certain
needs and problems were only steps on a longer journey of transformation. Most commonly, restructuring is
incomplete and employment creation insufficient. Changes in regional needs and problems were territorially
uneven, and there are questions about the sustainability of capital investment and institutions established with
Cohesion policy support. Also, the economic crisis and fiscal constraints are undoing some of gains.
The research demonstrated improvements in the sophistication of EU-funded regional development strategies and
programme management, and all of the regional case studies provided examples of successful interventions or
projects, collectively spanning the spectrum of economic development support. However, there were also many
examples of poor practices where regions were slow to learn from what was happening elsewhere. A major
difficulty was the fragmentation of funding across too many interventions or small projects.
The study provides clear evidence to support the direction of Cohesion policy in 2014-20, specifically with respect
to the emphasis on conditionalities, the new results-orientation and the enhanced performance framework. It is
not clear, however, where the identified deficits in administrative capacity - in the conceptual approach to
programming, strategic planning techniques, analytical methods to support project selection, and the quality or
focus of monitoring and evaluation will have been resolved before the new programmes are launched.
specialisation in present Cohesion policy makes room for attaching a greater weight to the preferences of the
Member States, but on the other hand in formulating their regional strategies they need to pay more attention to
the choices made by the other countries. It is almost inevitable that the negotiations will focus on the direct effects
and, in particular, the financial contributions expected by the Member States. The EU interest lies in emphasising
the advantages of the single market and in making sure that, while further opening the market, the development
potential and innovation capacity of all regions is fully exploited, leaving no regions behind.
In order to be able to capture the interdependencies of the choices made by the Member States and show the
effect on the EU economy as a whole, this paper uses a spatial general equilibrium model in which the economies
of all NUTS2 regions are represented. The spatial distribution of the impact of Cohesion policy is framed within the
projections of the Commissions macroeconomic model (QUEST3R&D). The approach is not new and has been
tested with other combinations of regional and dynamic multi-country models.
Two simulation exercises are presented to illustrate the implications of the choices on investment available under
Cohesion policy. In the first one, the reduction in transport costs resulting from the investments in infrastructure
financed with contributions from the Structural and Cohesion Funds are carefully assigned to the regions and to all
bilateral connections between them. Even though the largest part of the funding in the category of infrastructure is
directed towards the Member States that joined the EU in the past decade, it can be shown that the investments
have positive effects on the more central regions as well, precisely because they benefit from improved
connections with so many of the regions to which the funds are allocated. This reinforces the point that, although
with the enhanced mobility of capital and firms it may be difficult to simulate where the demand and shares of
profits will end up, it will in principle be possible to find a redistribution of the benefits of greater economic
integration that leaves all regions better off.
The second simulation assumes that the support to research and innovation from the Structural and Cohesion
Funds will allow the less developed regions to increase total factor productivity and reduce their distance to the
technology frontier. This is based on solid empirical evidence of the effect of R&D on total factor productivity and
econometric evidence that domestic R&D will make it easier to absorb the knowledge from elsewhere and so help
the catching up of lagging regions. The model allows for differences between sectors, and for shifts in the sectors
of production in the regions, which typically depend on the extent to which the gains in productivity are translated
into competitive advantages. A further analysis of the simulation results suggests that without price changes there
would be little effect in the long term. It should be noted that, given the freedom of capital within the single
market, it is difficult to pin down where the demand resulting from the availability and use of EU funding will end
up, and no attempt to do so is made in the simulations. This does not take away that shifts in demand play a role in
the agglomeration process.
Surveys of evaluation community (evaluators, decision-makers, civil servants responsible for management of
evaluations) suggest that over time satisfaction with the quality of evaluations has steadily increased. Measures
targeted at building evaluation-capacities, spread of evaluation culture, developments of guidelines and evaluation
standards and learning-by-doing process have contributed to increasing quality. Nevertheless, several challenges
remain.
The first challenge is related to building a robust evidence base. To date majority of the evaluations have mostly
relied on data collected through surveys, interviews and desk research. They generated useful knowledge on cases
(projects, programmes) under analysis. However, the capacity of such evaluation designs to generate conclusions
generalizable across programmes and sectors has been limited. Furthermore, administrative monitoring system
was not designed so as to collect data for counterfactual evaluations. Therefore, only several of them have been
carried out to date. This is why the impact evaluation based on rigorous approaches and methods, which should
become a methodological backbone of the Cohesion policy in the programming period 20142020, is one of the
greatest evaluation challenges in Lithuania.
The country lacks experience in assessing impacts as recommended by the EC for the programming period 2014
2020. Counterfactual impact evaluations need not only a deep knowledge and experience, but also other
conditions, such as adequate financial resources for data collection and analysis, sufficient availability of proper
monitoring and administrative data. A central problem of the evaluation process is accessibility and reliability of
data, data managers close cooperation with one another and provision of administrative data for evaluation.
The second challenge is related to systemic use of knowledge generated by evaluations during the decision-making
process. Lithuania has set up a monitoring system that collects data on the extent to which recommendations
provided in evaluations were implemented by responsible bodies. The results revealed that approx. 2/3 of
recommendations are taken on board. Assessment of the use of evaluation results showed that the
recommendations implemented during 20082012 mostly promoted:
This suggests that while evaluations have significantly contributed to improvement of operational aspects of
implementation, the impact of generated knowledge on strategic decisions could be higher.
resources into new waves of investment projects; their potential to attract additional financial resources,
particularly from the private sector; their ability to trigger incentive effects leading to better project quality, as
investments need to be capable of remunerating investors; finally their ability to attract expertise from financial
intermediaries, including IFIs, and the private sector, with positive effects on the capacity of managing authorities
and other stakeholders to use EU resources in a financially self-sustaining manner. Naturally, the benefits
associated to any positive performance need to be weighed against the potential additional costs in setting up and
managing financial instruments.
The paper will take stock of the experience matured in the 2007-2013 cycle in implementing and managing UDFs,
and to what extent their performance on the above dimensions can be judged on the existing evidence. It will be
argued that the impact intensity and the relevant performance dimensions are likely to vary depending on the type
and structure of UDF, the financial products supported and the institutional context. These factors appear to be
important determinants of the successful implementation of financial instruments and their policy performance,
which for UDFs should ultimately be judged on the basis of their contribution to sustainable urban development
their core objective in 2007-2013 and more broadly to the success of European policies for competitiveness and
growth. The discussion will be concluded with considerations on how the experience gained in the implementation
of 2007-2013 financial instruments for urban development has informed the 2014-2020 EU policy approach. The
current programming period foresees a markedly stronger role for financial instruments as cohesion policy tools
and the paper will discuss what the experience gained through the JESSICA financial instruments can teach us on
the opportunities and barriers to the implementation and successful deployment of financial instruments in the
current programming period.
ASSESSING FROM THE EUROPE 2020 MACRO PERSPECTIVE THE RIS3 OF THE EU 28
REGIONS AND MEMBER STATES : KEY LESSONS AND POLICY IMPLICATIONS
Guenter Clar, Steinbeis-Europa-Zentrum, GERMANY
At the policy level, Cohesion Policy has been more formally related to the overall Community Policy frame over the
years in the last decade to the Lisbon Strategy with the 2005 Communication Cohesion Policy in Support for
Growth and Jobs. Community Strategic Guidelines, and the National Strategic Reference Frameworks 2007-2013.
At present, in the framework of the Europe 2020 Growth Strategy, further integration is the objective, outlined in
the 2010 Communication Regional Policy Contributing to Smart Growth in Europe 2020. Concentrating funds on
a few priorities of EU relevance, a strong policy focus on innovation (in the broad sense) is also prominent in the
European Structural and Investment Funds (ESIF). However, relating policies through open co-ordination has
proven easier than synergistically co-investing from different funds. Considerable (multi)governance and
operational challenges exist, and numerous synergies guides aim to facilitate relating investments from ESIF and
other EU programmes in the real, not so cohesive world of regional decision makers.
While basic structural differences are not likely to disappear soon, the 2012 Common Strategic Framework
provides the basis for better coordination between the different ESI Funds, and with additional resources available,
e.g., through the EU Programme for Employment and Social Innovation (EaSI), Horizon 2020, the Connecting
Europe Facility or Youth on the Move. To overcome practical implementation difficulties, however, requires more
than working on bureaucratic barriers and overlapping investment areas. Important is a better harmonisation early
in the policy formulation process, when strategies, roadmaps and support programmes are designed. In the
current programming period, this strategic alignment could indeed materialise in the context of the ESIF approach
to Research and Innovation Strategies for Smart Specialisation (RIS3). In the RIS3 guide of the EC, a six-step process
is outlined with strategic tools, which are in many ways similar to those applied in the Research Framework
Programmes, and which there lead to, e.g., Strategic Research Agendas (SRA), Strategic Innovation Agendas (SIA)
or Strategic Implementation Plans (SIP).
How were, in the RIS3 submitted, these strategic elements applied? How have the main Smart Specialisation
characteristics been taken up? How do the prioritised R&I investments represent concrete links, and allow the
expected synergies with other EU, national and regional funds to be realised?
To look at these questions from the macro perspective of the totality of the EU 28 regions, the European
Commission established an Expert Group to examine relations between Smart Specialisation and Horizon 2020,
both in a current and longer term perspective; to assess individual RIS 3, and how they are positioned vis--vis the
overall Europe 2020 context, and contribute to its Growth Strategy.
At the time of the conference, the Expert Group has finalised its work, so that main lessons and key policy
implications can be presented. Foci will be on EU 28 cohesion, the European Research and Innovation Area (ERA)
and the international dimension; multi-level governance; the entrepreneurial discovery process, involving
stakeholders and policy experimentation; evidence-based, outward- and forward-looking priority setting; strategic
view of ESIF/Europe 2020 and trans-policy-field and trans-governance-level synergies.
regarding democracy and citizens participation. Partnership, as a result, acquired a meaning of a wide-scale
consultations process. This process is meant to ensure communication with actors-representatives of the general
public aimed at 1) demonstrating transparency of the policy process to societal actors through information sharing,
2) collection of the policy input from actors and 3) collection of policy demands from actors.
The paper argues that understanding how actors relate to policy requirements rather than how they react to them
is critical for revision and improvement of cohesion policy practice.
10
administration and governance network. Its working principle is the autonomy based on vertical and horizontal
partnership, according to the multilevel governance. I conclude that the principle of subsidiarity plays a specific
role due to the decentralisation of central assignments in the division of power of states at local and territorial
level in the co-operations across the border.
The Regulation (EU) No 1302/2013 of the European Parliament and of the Council of 17 December 2013 amending
Regulation (EC) No 1082/2006 on a European grouping of territorial cooperation (EGTC) as regards the clarification,
simplification and improvement of the establishment and functioning of such groupings. The revised EGTC
Regulation shall apply from 22 June 2014.
11
In particular, we will be able to test whether soft territorial capital assets are a more favourable pre-requisite to
Cohesion Policy investments in innovation and human capital, and which are the territorial capital prerequisites for
the effectiveness of cohesion policy investments in the various axes, soft and hard.
As a consequence, the paper will be able to provide indications on which Cohesion Policy mixes are more apt to
different territories at European level.
For example, the paper will show whether it is more impactful on growth investing in transport infrastructure in
core areas, where this can help overcoming congestion, or in peripheral areas, where it may help providing a
minimum level of public capital. Similarly, it will show whether investments in education and training provide more
growth in intermediate areas, where it can help upgrading the industrial structure to the upper level, or in areas
which are already endowed of it due to increasing returns. This analysis will be performed for all main axes of
cohesion policies with a classification of actual European regions into five categories based on territorial capital.
This analysis will hopefully help to develop more tailored Cohesion Policies, by concentrating investment in
different axes in different types of regions.
12
Improving the double territorial directionality of labour migration to promote true mobility of European
young workers.
Apply policy measures at EU level and not depending exclusively on the employment policies of each
member state. EU policies in this field should be really multilateral.
Strengthen the return movements of workers. After learning new languages and experiencing new forms
of labour organisation, young workers can contribute to their home regions development.
Harmonise the qualification of the jobs with the education level of youngsters. In this sense, the Regional
Innovation Strategies for Smart Specialization (RIS3) can play a key role.
There is a real danger of creating a further dual structure centre-periphery in the European labour market with
increasing costs for all EU member states (including the countries that are currently benefiting from this situation).
13
HOW DOES THE NET IMPACT OF THE EU REGIONAL POLICY DIFFER ACROSS COUNTRIES?
Mara Giua, Universit degli Studi Roma Tre, ITALY
Riccardo Crescenzi, London School of Economics, UK
The Cohesion Policy of the European Union (EU) is one of the most important regional development programmes
in the world. Despite the political emphasis placed on the economic convergence objective, and the substantial
amount of financial resources absorbed, the EUs economic development geography remains however highly
uneven. At the same time, nonetheless the large number of studies provided, the academic literature has not yet
reached a consensus on whether the Policy promoted economic opportunities and developmental trajectories of
the EUs most disadvantaged areas. Even though the EU Cohesion Policy follows the same set of rules and
regulations throughout the EU, the literature suggests that its impact is highly differentiated across member states.
Even if it has a unique design, the Policy implementation may in fact acquire different features in different
countries: different levels of governance and different actors are involved from country to country. A main issue in
this respect is represented by the effect of endogenous aspects such as structural cultural institutional and socio
economic characteristics that are likely to be territorially-specific and that are difficult to be disentangled from the
net impact of the Policy.
This paper aims to test to what extent the heterogeneity across Member States (MS) depends on the different
roles played by territorial conditioning factors or whether, on the other hand, it reflects broader national-level
factors, answering to the question: once the conditioning factors are removed, does the Policys impact turn out to
be unique for all EU MS?
The paper will take advantage of a Regression Discontinuity Design (RDD) based on an innovative spatial approach
to estimate the effect of the Policy irrespectively of the role of territorial conditioning factors. By estimating the
net Policy impact for each country separately, it will shows if the heterogeneity on the Cohesion Policy results
highlighted in the classical regression framework literature is due to the different role that conditioning factors can
have in different contexts or if the substantial differences across countries survive even after controlling for
endogeneity bias via RDD. In the latter case, the heterogeneity of the Policy impact can be ascribed to country
specific aspects originating at policy-design and implementation phases. In particular, country macro effect
specifically part of the Policy, such as institutions, composition of the expenditure, governances structure,
thematic and territorial concentration of the resources would emerge to be crucial in determining the ultimate
policy impact.
According to the methodology exploited, which leverages within countries spatial discontinuities (namely,
administrative boundaries between Objective 1 and non-Objective 1 regions) the analysis is forced to focus on
the EU MS that in the policy programming periods of interest (until 2000) were divided into Objective 1 and
non-Objective 1 regions presenting so that a comparable Objective 1/Non-Objective 1 spatial boundary
discontinuity: Italy, Spain, Germany and the UK (England and Scotland).
The paper shows that a large part of the heterogeneity across member states disappears when appropriate
counterfactual methods are adopted. The Policy impact coefficients estimated by the RDD models by comparing
areas increasingly closer to the policy-change boundary are positive for all countries except for Germany. For this
country, however, results need to be interpreted with caution and within a broader framework accounting for the
unification process dynamics in place during the 90s.
The largest part of heterogeneity characterizing the majority of cross-country impact analyses is eliminated by the
exogenous RDD models. That means that the lack of consensus of the literature can be largely due to the
differences in country specific conditioning factors not removed by endogeneous analyses. However, since the
results remain slightly different and grouped according by MS characterization, other aspects, apart from the
elements that compose each territory, may be shaping the policy outcome across space. Country specific
governance and policy implementation are likely to play the most important role in this respect. Several elements
can have a determining influence: the different scale and scope of funding; the distribution of funding among
different priorities; the role played by national governments; the relationship between regional administrations
and sub-regional actors; the distribution of funding according to different level of disadvantages; the
14
characterization of public-private partnerships in the management of the policy. In other words, the degree of
place-based-ness that each country gives to the policy.
The resulting policy implications are particularly significant with respect to the current debate on the EU Cohesion
policy, grounded on the concepts of governance, specificities and conditionality. They both support the
predominant role played by the policy within the 2014-2020 budget and highlight the need to reform the policy by
giving it a stronger place-based perspective. A context-specific approach can maximize the benefits for territorial
cohesion also in a limited resources perspective. Greater concentration upon priorities; key changes to the
governance system; increased leverage effect of investments; simplifying management rules; greater
concentration have a key relevance for a reformed Cohesion Policy.
15
16
17
Close cooperation between different instruments co-financed by the European Structural and Investment Funds
should provide many synergy effects and high added value for people at risk of social exclusion and poverty.
Thanks to that expected concrete results should be better defined and should be clearer for all stakeholders as
from the beginning of the programming process.
Therefore, this presentation will offer an occasion to discuss the challenges that are faced by local initiatives in
Poland and the EC expectations linked to this approach. Results of streamlining CLLD under ESF and other EU
Funds, focus on development of community based care and on growth of social economy sector are of special
interest of the Commission.
BUILDING RESILIENT ECONOMIES: LESSONS FROM THE CRISIS FOR EU COHESION POLICIES
Adrian Healy and Gillian Bristow, Cardiff University, UK
The economic crisis of 2008 dealt a fundamental shock to the economies of the EU, from which many are still
struggling to recover. At a time of widespread fiscal austerity, the EUs Cohesion Policy provided one of the few
sources of funds that did not suffer cutbacks and reductions as authorities sought to mitigate the worst effects of
the crisis. However, this did not mean that resources remained accessible to all parties.
To date, Cohesion Policy debates have tended to centre on one of two questions. Either the more politicized
question of scale and efficiency who gets how much, who gives how much, whether the money is well spent and whether the budgets would be more effective if repatriated to Member States; or more academic work
focusing on the effectiveness of the EUs only explicit - transfer policy.
One area that has featured less strongly in the debate is the role that the European Structural and Investment Fund
programmes can play in supporting regional economies through economic crisis. The last budgetary period began
in 2007 and ended in 2013. Thus, it neatly spanned the period from the start of the economic crisis. This paper
seeks to examine how Structural Fund programmes were affected by the economic crisis in a number of regions
and how they, in turn, responded to the changing economic circumstances in the regions concerned. In doing so
the paper sheds a light on the role that European Cohesion Policy can play in supporting the resilience of European
economies.
As Cohesion Policy moves into a new programming period it is now appropriate to look forward and to ask
questions of the role and purpose of Cohesion Policy into the future. Reflecting on the lessons from the crisis the
paper considers whether the new policy framework for 2014-20 addresses the lessons, how it does so and if not
why this might be the case.
The paper argues that whilst much of Cohesion Policy will remain concerned with strengthening the economic
foundations of economies, some consideration should also be given to the role that it might play in assisting
economies to react and respond to economic shocks, and so promote territorial and economic cohesion. The paper
concludes with reflections on the future role of Cohesion Policy in addressing the lessons of the recent economic
crisis and the challenges of the current long stagnation.
18
to promote polycentric development, improving living and working conditions, creating preconditions for business
development, mobility as well as availability and high quality of public services. Implemented projects provided
complex solutions for local development issues, addressing multiple local needs regarding development of public
infrastructure in a single project and ensuring coordination in time and space of investments related to different
sectors. Most projects provided investments in transport infrastructure, energy efficiency of municipal buildings,
infrastructure for education and culture. Yet very few municipalities chose investments in public infrastructure
necessary for business development and creation of jobs (partly because of limitations related to state aid rules),
which would have been beneficial at time when regions experience economic difficulties as a consequence of
economic crisis.
Based on this experience, in the 2014-2020 planning period Latvia has elaborated new EU funded place-based
support programs for municipalities. Local development strategies will remain as an essential precondition to
attract EU funding. However the new measures are going to have a much stronger emphasis on the promotion of
entrepreneurship and the creation of jobs in order to increase impact of this support on economic development in
regions. Latvia is already working on the necessary preconditions for this change, including considering terms for
application of state aid rules in these support programs, as well as building capacity and skills of municipalities in
cooperation with entrepreneurs. Latvia is also going to use the new Integrated Territorial Investment tool for the
nine largest urban areas. This support will cover six support measures under several thematic objectives that are
going to finance integrated actions to tackle economic, environmental, climate, demographic and social challenges
that these municipalities face, at the same time developing also functional links between the surrounding area and
the city or town.
Place-based measures are more and more promoted in the EU regional policy and have a significant contribution to
development of territories. Yet in implementation of place-based support programmes still a number of issues
arise that need further discussions at the EU level. Firstly, how to ensure that as a result of EU funds investments
for territorial development both national and EU goals are met still maintaining the discretion for municipalities
regarding the opportunity to choose priorities for EU funds investments at local level?
Secondly, how to balance public investments in areas that show the best return in terms of highest development
indicators in the country and investments in other areas promoting balanced regional development? One of the
areas with a significant development potential is small and medium-sized urban areas. In the context of discussions
about an EU Urban Agenda Latvia during its presidency is going to emphasize the crucial role of small and mediumsized urban areas in regional development, which has been underestimated in EU policies and studies so far.
Development of small and medium-sized urban areas is closely linked with the overall regional development since
these areas are crucial in providing the necessary availability of job opportunities and services of general interest to
residents of surrounding rural areas, yet they also contribute to development of metropolitan areas being
connected in a joint polycentric network.
Thirdly, it is clear that successful territorial development requires synergy between different sectoral policies as
well as cooperation between different levels of government. Since coordination of public investments in 20072013 has not been sufficiently effective, in the 2014-2020 planning period Latvia is introducing two new policy
coordination tools investment mapping and wider application of territorial principles in implementation of
various EU funded sector support programs. Consequently, another important issue worth discussing and
exchanging good practise at the EU level is: how can the contribution of sector policies to territorial development
be maximised? Which tools are the most effective in strengthening territorial dimension of sector policies and
providing genuine, not formal policy coordination on the ground and what are the preconditions for their success?
This paper is going to discuss the aforementioned issues based on the experience of Latvia from the
implementation of EU funds support in 2007-2013 and preparation of support measures for 2014-2020.
19
20
The purpose of the paper is to present the changes in social cohesion in the European Union member states in the
context of the crisis after 2007, taking into account the most important implications for public policy. The work
includes a concept of the use of income difference indicators to determine the levels and changes in social
cohesion.
The initial part of the study introduces the essence of social cohesion. The results presented in the next part of the
paper indicate that the issues regarding to social cohesion take a very important place in the European Union
treaties and strategies. In the next part of the work selected indicators are used to analyse and evaluate changes in
social cohesion in all member states of the European Union in the period of 2007-2012. The final part of the study
includes many conclusions and recommendations for public policy.
21
22
Moreover, we find that some elements of the EU economic policy framework, such as foreign trade policy,
monetary policy or even R&D and innovation policy, continue to face major challenges in meeting the realities and
needs of the 28 member states with very different levels of competitiveness. Specialisation on low-income
activities such as low- and medium-tech manufacturing, and non-knowledge-intensive services along with the slow
industrial change are also the key reasons that do not allow for closing structural cohesion gap within the European
Union.
The paper concludes that the real strategy question that presents the potential of greater living standards and
socio-economic cohesion is the identification of new major areas of growth that Europe could focus on, and of the
steps to be taken across Europe for meeting these future opportunities. Europe 2020 strategy needs a more
stringent and actionable vision. This, in turn, allows for better re-alignment of research, education and labour
market policies, etc.
Setting the incentives right is crucial if the execution of a strategy is to be a success. Lisbon Strategy was originally a
strategy without any financial resources , soft policy co-ordination, such as OMC, applied prior to the crisis have
proven insufficient, Lisbonisation of Cohesion from mid2000s has helped somewhat, but this has been too little
and too late. The adoption of cohesion funds has, however, a history of focussing too much on the absorption and
less on impact and results. Recent reform of cohesion policy, the introduction of the element of performance
contracts for the 2014-2020 period will hopefully improve the situation with this respect. It is yet to be seen
whether new and more stringent methods macro and initial conditionalities, EU semester taken more seriously
introduced for 2014-2020 EU financial period will work or need further reinforcement.
23
effects. Evaluations and future design of Cohesion Policy should fully take stock of this cross-border nature of its
impact.
24
The cohesion policy framework spells importance of an integrated approach to territorial development, including
through Community-led Local Development, Integrated Territorial Investments (ITIs) and sustainable urban
development, among various policy ideas and themes, under territorial cohesion. However the specifics for
achieving treaty objectives are near general and in some cases can even be categorized as confusing. The paper
analyzes how territorial cohesion would be the guiding criterion for the various programmes in light of the some of
the ambiguities (such as "strategic coherence, territorial scale, relationship between thematic concentrations" etc.)
in its specificities which has not been spelled or addressed in the Cohesion Policy framework. The paper also looks
into some of these specificities to understand how far Territorial Cohesion (7 years, since, being part of Lisbon
Treaty) has been understood and incorporated in the current cohesion policy. A case of six German transnational
programmes (Interreg) have been studied as base casees to arrive at some of the answers to these wide ranging
questions.
25
The paper draws on the findings of the project of the Polish agency, National Science Centre, entitled Territorial
cohesion category in cohesion policy. Implications for economic growth (no. 2012/05/B/HS4/04212).
26
Moreover, in some countries (e.g. the Netherlands) it is common for youngsters to work part-time so they can
continue studies after entering the labour market. Unsurprisingly, the youth employment rate in these countries is
higher than in Latvia where the society is not accustomed to a flexible job schedule, thus many youngsters have to
choose between studies and a full-time job.
So we may conclude that "the youth unemployment problem" is not a problem per se in Latvia. It is simply a
combination of low skilled unemployment and regional unemployment problems. Youngsters suffer from these
problems just like people in other age groups do. Problem regions should be defined based on NEET (youth not in
employment, education or training) statistics, not on youth unemployment statistics.
Redistribution of EU funds to combat the youth unemployment could still be beneficial if these measures improve
education and/or skills of young people (rather than result in employing one group of youngsters to excavate a
trench and another group to fill up the trench in order to obtain a short-term improvement in youth
unemployment figures). New job places for youngsters should not be low-skilled since such would only demotivate
them from developing their professional skills, thus increasing the number of social benefit recipients in the future.
Moreover, many practical skills (for real life, not only for grade) should be obtained at school. It may look funny if
after 12 years at school a young person needs computer proficiency, foreign language and CV writing courses in
order to enter the labour market.
Programming instruments : focused thematic concentration on not more than four thematic objectives
per Program as well as joint partnership agreements per Member State with analysis on synergy with
other investment instruments, macro regional and EU, national, regional level strategies.
II.
Monitoring instruments: common ETC indicators, performance framework including milestones, unified
Interact harmonized Program implementation tools, which provide joint project applications, information
systems, check lists, project assessment criteria etc.
III.
Spill-over effect: enlarged cooperation scope outside EU (Norway, Switzerland, Belarus, Russia etc.), focus
on knowledge transfer and improvement of EU Cohesion policy efficiency through shared experience and
good practices (Interreg Europe), joined logo and Europe wide recognition, joined development objectives
in the cross-border regions, macro regional solutions, joint instruments for developing EU competitiveness
towards other markets .
It is crucial to start discussions on the approach to analysis of ETC/ENI results already now to ensure the collection
of necessary data at the very beginning of the programming period. At the moment most of the ETC programs are
submitted to the European Commission and will be approved in the first half of 2015 when the first calls for project
proposals will be organized, where new joined instruments will be incorporated into ETC processes.
The most important is to change the way of thinking that ETC programs are of small critical mass towards big
investments of mainstream programs. The 2007-2013 experience proved that they have very important transregional and trans-border effects of sharing best practices and knowledge transfer among EU member states.
27
Results of mid-term, follow-up, result dissemination evaluations of ETC cross-border cooperation and transnational
programs (e.g. Estonia-Latvia, Latvia-Lithuania, Central Baltic Sea region, Baltic Sea region etc.) in 2007-2013
demonstrate that specific outputs and results were successfully achieved at each program level, however there is a
challenge to make cumulative or comparative analysis at macro or EU level. Among good practices and supporting
tools for raising visibility and capitalization of the results of ETC programs can be mentioned publicity activities,
including annual EU cooperation days and events with involvement of different stakeholders and institutional
levels.
The questions to be discussed at the beginning of the new 2014 2020 programming period implementation:
-
What could be an influence of ETC/ENI programs in the development of EU regions in the future?
How to use potential of ETC/ENI programs contribution to achieve macro regional and EU 2020
objectives?
What are ETC/ENI opportunities for improvement of Cohesion policy interventions?
RIS3 strategies are now finally in place and translated into implementation documents,
Policy makers perception as regards their scope of action has changed for the better,
The perception of the process as such and its main benefits has evolved, and
The diversity of perceived benefits of RIS3 across Europe has diminished or not.
28
and the efficiency of public administrations and public services at national, regional and local level, and where
relevant, of the social partners and non-governmental organisations, with a view to reforms, better regulation and
good governance EU devoted funding from ESF. However, it still remains at the top of the agenda for possible
improvement in the upcoming period.
The new rules, which govern the next round of EU Cohesion policy investment for 20142020 support, marked the
end of two and a half years of negotiations among the EU institutions last December 2013, and for the first time in
EU history, the regulation within the package entitled as the Common Provisions Regulation (CPR) for EU Cohesion
and Structural Funds, increases the importance of applied project management skills and methods as criteria for
selecting beneficiaries of EU funds and advance uptake of Project, Program, Portfolio Management (PPPM) skills as
part of the solution to the lack of administrative capacity. It falls under human resources category which is one of
the three key elements to be addressed when considering the implementation system put in place for the
management of the EU Funds and when defining administrative performance.
Project Management Institutes assessment of various studies related provided by Research Department shows
that the application of program and project managements practices can enhance the performance of public
authorities . Furthermore, as the CPR has been established in order to improve coordination and harmonise the
implementation of EU Funds, it is expected that it will simplify its use by recipients and reduce the potential risk of
irregularities. However, building the capacity of local actors to develop and implement operations including
fostering their project management capabilities, should be taken into account as a one of the effective
management of the EU Funds though drivers. Managing EU Funds requires unique skills, capabilities, processes and
practices, particularly project and program management. The above mentioned critical disciplines that can be
applied to EU Funds may ensure effective implementation success on the ground in the EU Member States.
Furthermore, PMIs research carried out shows that organizations need to focus on the development and training
of their talent in order to achieve superior project performance, successful strategic initiatives and become high
performers in order to avoid high cost at the end. In addition, not only must focus on development of people and
practices by which they do that, but also need to focus on managing people through rapid changes - strategic focus
on people, processes and outcomes are crucial items. However, institutional capacity is not just a technical matter
of training civil servants in the European Union and other markets across, but should be seen as component of
good governance which is a basis for institutional capacity building, creating trust and social capital.
As per mentioned, recently (September 2014), London Economics (LE) together with Project Management Institute
conducted a study of success factors in public sector and programme management, in the United Kindgom. This
study forms part of PMIs ongoing effort to understand what works in project management globally (whether its
EU Funds financed projects management or other) and to make these insights available for policy makers,
academic community, the wider public. The success of projects undertaken by public sector bodies is a sensitive
topic, as such, however the majority of interviewees (project managers and senior responsible owners involved)
agreed to participate in the research. One of the interesting comment received from the person involved in the
area of management of the project that received the funding: You can undertake some training into how to
deliver a process, and you can undertake that process, but it does not mean that you can convert this into
successful process into successful delivery. Converting the process into successful delivery requires you to be able
to differentiate between undertaking the process as a means of ticking the box and undertaking the process to
meet the intent of project management of getting all parts of your organisation, and other stakeholders to work
towards delivering your objective, and making them want to deliver this objective because they understand how
they and the organisation will benefit from delivery. People and their capability and engagement is what delivers
success.
Increasing complexity of projects and the ever increasing pace of change, organizations / institutions recognize that
it is no longer enough to focus their talent hiring and development on only technical project management skills.
Organizations / institutions need project management talent that has the ability to deal with ambiguity and can
lead strategic initiatives that drive change in an organization / institution . This principle may be applied within the
management of EU Funds accordingly. Ideally, an organizations / institutions approach to talent management is
designed and executed to meet broader strategic needs.
Moreover, it has been revealed by PMIs research that high-performing organizations / institutions are more than
twice as likely than low-performing organizations / institutions (69 percent and 31 percent) to have talent
29
management programs aligned to organizational strategy . Organizations in which talent management is aligned to
organizational strategy have an average project success rate of 72 percent, while organizations in which talent
management is not effectively aligned to organizational strategy have an average project success rate of 58
percent. The difference of 14 percentage points in project success rates equates to risking 50 percent more project
money when talent management is not effectively aligned with strategy .
Effective management is clearly linked with processes and the research has confirmed that organizations /
institutions can clearly benefit from maturing their project, program and portfolio management processes. It
demonstrates that process maturity leads to success, and despites this, PMIs latest findings reveal that many
organizations are not taking sufficient action to mature their processes as evidenced by the trends in the
perceived value of project management, the growth of project management offices (PMOs ), the use of
standardized project management practices throughout organizations, and the maturity levels of project, program
and portfolio management. A study on "Implementation of cohesion policy, 2014-2020: Preparations and
administrative capacity of EU Member States" revealed that the efficient and effective management of the Funds
in 2014-2020 is expected to be a major administrative challenge, with increased demands on administrative
capacity compared to 2007-2013 . Moreover, a further challenge to capacity would be the reform of administrative
structures, involving varying degrees of change to institutions, procedures and human resources.
EU Funds effective management vs focus on the outcomes. Successful organizations have a continued focus on the
outcomes of the intended benefits of their projects and programmes . Based on the mentioned, its clear that once
the organizations developed and deployed three focus areas (people, processes and outcomes), it would lead to
increased success of both projects and strategic initiatives on the ground. And the research proves that
organizations that develop these competencies lose 12 times less money and mitigate the high cost of low
performance .
Why project management practices are important for this theme? Because it gives analysis, competitive
intelligence, market analysis and information gathering outcomes that EU Institutions not necessary are able to
capture while analysing the efficient implementation of policy objectives. PMIs research methodology includes
investments in both quantitative and qualitative research, which meet globally-accepted standards of rigor. This
primary research is carried out independently or in partnership with credible research and consulting entities, with
a goal to capture deeper information and insight on all aspects of the profession, but especially on its evolving
practices and value to business success. Our surveys pursue respondents from diverse industries, departments, and
geographies (North America, Asia-Pacific, EMEA, and Latin America). Respondents answer a series of questions,
either through an online survey for quantitative research or in an in depth telephone interview format for
qualitative research, which are designed to capture the respondents perspectives around topics, practices, and
activities critical to the professional at any point in time. The research conclusions are based on analysis of the
quantitative data, which includes metrics relating to cost, quality, and time, which are the hallmarks of project
success. Research representatives look at what practices correlate to performance improvement. And they
compare the data of survey respondents to identify patterns of success and the practices that align with that
success.
Measures for reinforcing the administrative capacity of the authorities involved in the management and control of
the programmes in EU Member States will now finally be given the priority they deserve. And it is essential and
timely to address it respectively. The new Juncker Commission is standing for change, and that reform means
change and Juncker wants to show to the world that EU is open to change and ready to adapt to it.
When the EU will start thinking about effective Cohesion policy objectives delivery ? And why good strategies
whether they are linked within the policy objectives or within the organizations fail ?
Background note on PMI and its Research Department:
The Project Management Institute (PMI) one of the worlds largest non-for-profit membership associations and the
single largest body for the project management profession. Our professional resources and research empower
more than 700,000 members. Starting from 2014 PMI is investing in research to identify factors contributing to
project and programme success in the European public sector. With a particular focus on those EU Member States
that are net recipients of EU Cohesion and Structural Funds.
30
Additionally, PMI is highly regarded for its extensive research capabilities. PMI maintains and supports a very active
research arm whose mission is to act as the catalyst for the expansion of the project management body of
knowledge. The PMI Research Department shares knowledge with the project management community and other
communities involved to enable more effective project execution and achievement of success. The Department
helps to cultivate the project management body of knowledge though global research initiatives.
31
The European Commission as one of its objectives has raised the simplification of implementation of the EU funds.
In her presentation, the author will mention the foreseeable elements of simplification, as well as expressing her
view, whether these elements will provide an immediate positive effect. The single audit concept model is highly
supported, it could have a system simplification and administrative burden reduction effect, but the practical
implementation of it is not entirely clear.
Cost-benefit assessment and finding the right balance is not only the aim of the European Commission, but also of
each Member State. This requires a deep analysis, risk assessment and reflective action.
32
though was limited due to major changes of macroeconomic and fiscal environment during the financial crisis and
inappropriate mix of policy instruments. The very goal of poverty reduction measured by the poverty rate reflects a
relative situation, which is better targeted through taxation than through investment or subsidies. At micro level,
the results of interventions were mixed. Counterfactual impact evaluation was carried out with the aim of
assessing the impact of EU-funded active labour market policy measures on participants (unemployed people)
employment situation and income. Analysis showed that those measures which included the acquisition of new
skills had a positive effect on participants employment situation and income after the intervention. However,
wage subsidies were not as effective as expected.
The lesson for the European Commission and the Member States is to apply the conditionality framework looking
deeper into the policy content. Instead of asking for an increasing number of strategies, it should look whether a
coherent sectoral policy based on a right mix of instruments is in place.
33
Were these EU investments used in a smart, efficient and strategic way, in order to promote territorial
development, and explore the territorial capital of this vast, polycentric, and cultural and environmental
rich European peninsula?
What were indeed the main territorial impacts of the EU Cohesion policy in both Iberian countries?
Is the Iberian Peninsula a more cohesive territory?
How should the European Structural and Investment Funds be spent in the next programming period?
In synthesis, and regarding the first question, two conclusions can be drawn. Firstly, the priority given to the
infrastructural modernization (transports, social and environmental infrastructure) as a pivotal pillar for the
territorial attractiveness was clearly justified, due to the Iberian negative baseline scenario, in this domain.
Secondly, the support to the economic activity was not strategic and efficient enough to put the Iberian economies
alongside the most productive and innovative European ones.
However, the Structural and Cohesion funds do not act in isolation and represented less than 3% of the annual GDP
in both Iberian Countries. Even so, the use of the TARGET_TIA procedure concluded that their territorial impacts
were positive (more in Spain than in Portugal), mainly to the socioeconomic cohesion and the environmental
sustainability dimensions of territorial cohesion. Notwithstanding, the construction of two territorial cohesion
indexes (1990-2010) also show that the EU investments were not sufficient to achieve the goal of territorial
cohesion in Iberia Peninsula.
Finally, for the next programming period (2014-2020), we propose the concentration of the EU investments in the
renewable energy (mainly solar) economic cluster, as a strategic territorial development investment to reduce
fossil fuel imports, promote economic activity, employment, research and innovation, and to help the shifting to a
low-carbon economy.
SUPPORTING THE RICH AND THE POLITICALLY LOYAL: HOW THE STRUCTURAL FUNDS MAY
CONTRIBUTE TO RISING REGIONAL DISPARITIES IN EASTERN EUROPE
Gergo Medve-Balint, Hungarian Academy of Sciences, HUNGARY
The Structural Funds aim to decrease internal regional disparities in the EU member states and at the same time
they are also expected to narrow the development gap between the relatively poor and the wealthier countries.
These policy objectives are especially relevant for the Eastern European members which rank below the EU
average in terms of GDP per capita and also face high territorial disparities. However, this paper shows that the
simultaneous pursuit of internal and external convergence through the Structural Funds has promoted neither of
these goals in the East. It argues that the inappropriately designed regulatory environment and certain domestic
34
political influences on fund allocation have jointly determined that the spatial distribution of the funds has been
almost diametrically opposite to the originally stated goals.
By employing advanced quantitative techniques (multi-level linear and Tobit models), the paper tests the effects of
both regional and local economic and political factors on the territorial distribution of the 2007-2013 Structural
Funds in two Eastern member states, Poland and Hungary. In this period, both countries were among the top
beneficiaries of EU funds but their domestic institutional environment differed: while the territorial administrative
system in Hungary is strongly centralized, in Poland, which has one of the most decentralized systems in the new
member states, the regional governments (wojewdztwo) possess notable decision-making powers. Moreover, the
Polish units of local government (gmina) are far bigger both in terms of size and population than the municipalities
in the highly fragmented Hungarian system. In spite of these differences, the paper shows that the two countries
common mechanisms for distributing Structural Funds have produced very similar outcomes.
On the one hand, the paper reveals that in both countries the lack of a sufficient differentiation between the more
and the less prosperous regions in terms of fund eligibility generated unequal internal competition for the funds,
which primarily benefited the wealthier regions and localities. On the other hand, central governments have
enjoyed notable control over the funds which involved that political preferences and lobbying significantly
influenced their distribution. Both in Poland and Hungary political loyalty towards the central government has been
positively associated with the per capita amount of Structural Funds spent at the local and the regional level which
was not necessarily advantageous for the backward areas.
Based on these results, the paper concludes that the Structural Funds have promoted neither internal nor external
convergence. In the future, this may be avoided with a stricter application of the partnership principle to reduce
central government control over fund distribution. This also needs to be accompanied with a stronger emphasis on
building local and regional institutional capacity. Furthermore, the paper suggests that instead of applying a
European benchmark, the fund eligibility of the Eastern regions should be determined according to their internal
development positions. This would allow for a greater differentiation between the more advanced and the less
prosperous areas.
COHESION POLICY AND INNOVATION: HOW CAN RESOURCES BE USED MOST EFFICIENTLY?
Jose Mella-Marquez, Asuncion Lopez and Juan C. Salazar, Autonoma University of Madrid, SPAIN
This paper aims to unveil the links among public funds-which include Cohesion Funds- and the R+D expenses, the
innovation expenses, the sales of new products and the weight of the technological sectors where companies
work.
The data source is PITEC (Spanish acronym which means Technological Innovation Panel), which provides the
follow-up of the innovation activities of the Spanish companies in the period 2003 to 2012. PITEC supplies a high
number of variables for 12.000 companies which allow measuring the impact of public policies on innovation and
to identify the different innovation strategies used by the Spanish companies.
We test an econometric model to estimate how Spanish companies use the cohesion funds- and in general the
public funds- when utilizing their own resources with or without public resources.
Our preliminary results show that, first, both public and private resources are not substitute, but complementary;
second, the use of public resources are associated with better innovation results; and third, there is a sort of
spillover or spread effect by which the companies do an extra innovation effort in terms of more intensive
outsourcing, new intangibles assets, and training. Finally, we will make an additional analysis, comparing the
results obtained for the main regions of the country and the Spanish average.
This paper will be focused on policy recommendations for CP on how Spanish companies use the cohesion funds.
Our policy recommendations are:
35
These proposals for CP are supported by the Spanish empirical evidence, which comes from official surveys,
entrepreneurs and policy-maker opinions obtained from meetings held on purpose for writing the coming full
paper.
36
COHESION AND GROWTH: IS THE EU SYSTEM FIT TO FACE THE CHALLENGES BEYOND
2020?
Willem Molle, Erasmus University Rotterdam, THE NETHERLANDS
In the past years, the European cohesion policy has been thoroughly overhauled. It has been integrated in a
European balanced growth policy; defined in the Europe 2020 strategy. To keep focus it is elaborated as a place
based policy. To keep consistency it is using increased conditionality. The effectiveness of this new set up has still
to be confirmed by the expected results during the present programming period.
The EU growth and cohesion policy is a structural policy that addresses very long standing problems. So the
outlook of the policy needs to be a very long term one too. It implies analysing sufficiently long time in advance
whether adaptations will be needed. So assuming that the new set-up is going to be reasonably effective, one can
assess the type and magnitude of the problems that will still obtain in 2020. To this can be added new problems
that are likely to emerge in the future. Together they define the challenges the policy has to face beyond 2020. The
question that we ask ourselves in this paper is: Is the new EU policy set-up fit to face these challenges?.
In order to answer this question we analyse for each of the stages of the policy cycle two elements. In a first
(largely empirical) approach we check in how far the inadequacies that have become visible in the past do lead to
pressure for change. In a second (more speculative) approach we explore what new challenges are likely to emerge
in the period beyond 2020. We will also explore the alternative policy set ups that have to be envisaged to face the
new challenges. The combination of both analyses will indicate which elements of the policy set up will be marked
by continuity and what adaptation is needed to keep the policy fit for the future. In the last category one factor
stands out particularly.
Successful integrated policy making is critically dependent on the quality of the national and regional
administrations. The convergence countries (that are the largest beneficiaries) cope with big problems as to the
quality of their governance and are likely to still suffer from this problem around 2020. On the contrary, the
competitiveness countries perform on average rather well on this score. So it seems that the chances for success
are highest for those who least need EU support, while those who need EU support most cannot realize success.
We therefore suggest to introduce a conditionality check on quality governance before funds are committed,
coupled with a considerably stepped up effort by the ESI funds to improve quality government in convergence
countries.
37
THE ROLE OF FINANCIAL INSTRUMENTS IN IMPROVING ACCESS TO FINANCE IN LESSDEVELOPED REGIONS - COMBINED MICROCREDIT IN HUNGARY
Gyrgyi Nyikos, National University of Public Service/Permanent Representation of Hungary, HUNGARY
Purpose of the paper: Access to financing is certainly one of the most important components for the creation,
survival, performance and growth of SMEs. The combined microcredit is a unique financial development tool
where micro-credit and non-repayable assistance can be requested within one construction (other type of
combined microcredit is delivering both micro-insurance and micro-credit products). The paper analyzes the
Hungarian practice using this financial instrument, both looking at the empirical evidences and seeking for answer
to the question whether this form of support is effective, useful or not.
Design/Methodology/Approach: The paper focuses on the Hungarian experiences using micro-credit in the 20072013 financial period. The primary source of data is on one hand information from the Managing Authority for
Economic Development OP and a survey carried out by the Fejer Enterprise Agency. The paper explores also the
legislation on the new financial instruments proposed for the 2014-2020 programming period and responds to the
question, if the new tools can be able to achieve the top priority in practice: supporting SME competitiveness. The
paper uses sources of information based on desk research (studies, evaluation, official documents and adopted
regulation) and experiences from managing and implementing operational programs and projects.
Key results: The findings showed that to enhance impact of microfinance and to make the efficient use of the
sources available, it is crucial to strengthen complementarities and synergies between different instruments. The
use of financial instruments complementing with the more traditional delivery instruments (grants and support
services) can be a solution to improve access to finance in less-developed regions. However, providing the
adequate mix of access to finance and guidance is crucial. Financing needs to be complemented by intelligent
support services tailored to the needs of businesses at their different stages of development and for the
beneficiaries especially for micro-entrepreneurs - the one stop shop for the access to different sources is the
best solution. Providing this is not so easy for the institution system because of the different regulations (state aid,
different fundsetc.), but necessary for the simplification and reduction of the administrative burden.
Value: Combined microcredit (micro-credit and non-repayable assistance together) is a new unique tool, which is
completely in line with the priority of using synergies and integrated approach in the field of economic
development. Few studies evaluate the combined microcredit, which can become one of the products to provide a
more comprehensive response to existing market failures often leading to a lack of access to financial services for
excluded populations. The Hungarian experience shows a strong needs of using combined microcredit which
indicates that the tool can meet primarily the need of access to finance for those excluded from conventional
financing.
38
LINKING THE COHESION FUNDS INTO THE INTEGRATION OF YOUTH IMMIGRANTS IN THE
EUROPEAN LABOUR MARKETS
Gnl Oguz, TURKEY
Trends in international migration show that the integration of foreign-born youth in host countries has proved a
diffucult task due to the labour market policies of the European Union (EU). The integration of the immigrants into
the labour market continues to be a top priority for the member states. Even so, the EU is still far from developing
more comprehensive integration strategies, especially for less skilled youth immigrants. Compared with the nativeborn population, labour market outcomes are much weaker on average. There remains substantially limited labour
market opportunities. In terms of concrete actions within their respective spheres of competence, the member
states and the European Commission are called to ensure that the EU funds available for promoting youth
employment, in particular the European Social Fund (ESF), are effectively used. Mobilisation of finance to tackle
the social exclusion may be the best policy for labour market participation of youth immigrants. It may help to
increase their adaptability and to make the transition from school to work, as well as to support training for lessskilled foreign youth.
This study focuses on the importance of allocating of a much higher share of the Cohesion Fund to the ESF in order
to improve youth immigrants access to the European labour markets. Its main goal is to highlight the responsibility
of the EU that should use all available means to remedy this situation, although tackling unemployment is mainly
the responsibility of the member states. Having said that, funding is a key instrument through which the EU can
shape the integration policy developments in the member states, a particular attention is given to an analysis of
policy implications. So the combined findings gathered from the sources (i.e. the European Commission, as well as
other individual studies) are formulated into practical recommendations to assist the EU decision-makers and the
national governments in their support of immigrant youth integration process.
THE ACHIEVEMENTS OF THE 2007-2013 COHESION POLICY IN THE BALTIC SEA REGION
Nicoleta Carmen Olteanu, University of Bucharest, ROMANIA
As rather recent members of the European Union, the Baltic Sea Region countries have been among the most
effective when it comes to turning European funds into tangible initiatives, through their high absorption rate.
During the 2007-2013 budgetary framework, the Cohesion Policy has been successfully implemented within a
variety of areas in the Baltic Sea states. The total Cohesion Policy budget allocated by the European Commission
for 2007-2013 in the region, has been of 112.013 billion. The Eastern Baltic States are among the EU members
with the highest funds absorption rate, Lithuania being the first one, using 48% of its allocated funds. Behind these
results, there are a variety of accomplishments that each country in the region has reached.
The goal of this paper is to find out what progress has been made throughout the past budgetary framework, in
line with the priorities of each Baltic Region country. The Cohesion Funds have brought a significant increase in
GDP as well as a higher rate of expenditure in research and development. Furthermore, transportation and
communication networks have been improved. Environmental protection initiatives have been launched.
Education and training programmes have been implemented in order to adapt to a changing labor market. New
businesses and jobs have been created throughout the region.
The Lisbon Strategy has also been successfully applied, to enhance competitiveness, create more jobs and drive
progress. This paper finds that the Operational Programme on Human Resources and Employment has been
particularly successful in the region. Within the funds allocation process, a higher priority has also been given to
areas such as research and development, technology and innovation, education, entrepreneurship, employability,
as well as transport infrastructure, accessibility or environment.
Furthermore, the EU encourages transnational, regional and interregional cooperation, particularly through its
European Territorial Cooperation Objective and the European Regional Development Fund. Each country in the
39
Baltic Sea Region has been part of cross border cooperation programmes, with their neighboring countries, as well
as of interregional programmes.
Along with the European Strategy for the Baltic Sea Region, the EUs structural and cohesion funds have helped
shape a region that fosters innovation and progress, a region that turns itself into an invaluable source of lessons
and best practices. However, Europe is facing new challenges that will require future adjustments to the current
policies. Estonia, Latvia and Lithuania are still depending on energy supplies from Russia and require further
measures on enhancing their energy efficiency, sources and links with other countries, such as Poland and Sweden.
Increased mobility could require tackling a multicultural society and labor market, by encouraging inclusive and
non-discriminatory measures, through education and training. Furthermore, the EU Strategy for the Baltic Sea
Region could be better synchronized with, or even funded, through the Cohesion Policy, to facilitate region
branding and encourage cross-border cooperation between the countries in the area.
40
Territorial Impact of Globalization for Europe and its Regions has innovatively combined and compared
quantitative data on city networks and their flows with that on regional trade to inform the ESPON theme:
Continental Territorial Structures and Flows (Globalization). The results have great significance for the
development of European Cohesion policy in the context of increasing global economic integration and
competition from emerging economies. The study identifies for the first time a new European functional
phenomenon, the global macro-region, which is a space of intense economic and social interaction that is larger
than the EU, and so distinct from the European territory as a political entity. Its emergence illustrates that,
contrary to predictions of the death of geography and time-space compression (Harvey, 1989) with the
development of new communication technologies, distance effects and agglomeration economies are actually
playing an increasingly central role in shaping contemporary European relations.
Alongside this intensification of European relations at a macro-region scale, increasing returns in global new
economy specialized knowledge-based production and trade (financial and linked business and professional
advanced producer services) are an ongoing stimulus to functional centralities, boosting the concentration of
global functions, related services and employment in Europes gateway (global and globalising) cities. Flows of
labour, knowledge and finance that pass through the transnational firms with worldwide operational networks
located in these cities are integrating Europe in global production networks and determining the location of
strategic functions in worldwide value chains (Hopkins and Wallerstein, 1986; Gereffi and Korzeniewicz, 1994; Coe
et al., 2004, 2008). So the increasing fluidity of international finance capital facilitated by these global network
organisations, has actually been a spur to the reterritorialization of socio-economic activity in the form of
subnational, regional and supranational economic zones, mechanisms of governance and cultural complexes
(Held et al. 1999, p.28) and the fixing of capital in the real estate infrastructure of Europes cities. A counter-trend
is increasing competition between territories to attract mobile international capital flows at EU Member State,
regional and metropolitan levels.
The policy challenge presented for the attainment of EU 2020 Cohesion objectives is therefore how to support
agglomeration-dependent necessary economic growth on the one hand while achieving more balanced
development for territorial cohesion on the other. The results suggest that given the diversity of European regions
in terms of economic strengths and vulnerabilities, policy initiatives are required to combat territorial competition
and promote functional complementarities between global and globalising cities across the macro-region, and to
assist smaller towns and cities in benefiting from specialised roles in its globally integrated system of cities.
41
revealing the prevailing logics of EU Cohesion Policy. Second, the paper maps out how these logics affect the
implementation choices at the regional development level in view of the different interpretations of smartness
within regions. Preliminary investigation results will be presented suggesting the existence of several key logics,
such as, the competition and innovation logics, the development logic, the logic of Europeanisation and
institutional capacity building as a background and a context for specialization. Third, further analysis is presented
relating these preliminary findings to the respective operational capacities of specific policy tools applied via the
implementation of smartness by regions and regional actors; and thereby introduce the concept of smart
implementation in order to help analysts understand the application of EU Cohesion Policy in practice. More
precisely, the work will provide conceptual reflections on how the logics of smartness are turned into smart
implementation which will inform future reviews of the EUs smart, sustainable and inclusive growth agendas in
the future.
42
the possibility to reach the critical mass needed to make a lasting impact. The new regulatory framework approved
for the 2014-2020 programming period has already faced some of the same difficulties in Italy that hampered the
success of the cohesion policy in the previous programming period in Italy.
A first misstep was the much delayed approval of the Italian Partnership agreement. This Partnership agreement is
supposed to establish the global framework for the programmes strategy at national level. By approving it much
later than in most of the European Countries, Italy has already lost the first year of implementation to
programming.
A second example of recurring issues from the previous period is that of excessive fragmentation. The
concentration principle, is one of the pillars of the new programming strategy: unfortunately, however clearly
established in theory, it has been translated in to roughly 300 different actions, that quite probably will replicate
the weaknesses of the 2007-2013 programmes.
The SMART specialization strategies, one of the main innovations of the new period, that are supposed to help
European regions to concentrate resources on innovations capitalizing on the main natural, industrial and social
assets, have been translated at Mezzogiorno level in broad and unbinding lists of issues, often simply replicating a
static description of the regional economies.
The reduction of the National co-financing, proposed by the Italian government mainly to reduce the risk of low
and delayed absorption, if implemented without addressing the structural factors that have multiplied the time
needed for the execution of public investments in Italy, could increase the risk of a further decline in the
investment rate in Mezzogiorno, and of a divergence of its growth compared to the Northern regions.
How do actors at national, regional and local level perceive the results of the recent reform of EU
Cohesion Policy, namely as regards new provisions such as thematic concentration, ex-ante and macroeconomic conditionality and evaluation?
43
2)
What ideas do the same actors have about efficient regional, urban and rural development and labour
market or social inclusion policies?
3)
In terms of institutional arrangements for such policies, do the actors recognise an EU added value
through the implementation of ESIF and if so, for which arrangements?
4)
Can these actors imagine to become more directly involved in the post-2020 reform debate on EU
Cohesion Policy and what would be their vision for its future design?
How would the process of taking account of regional and urban development knowledge in the context of
the post-2020 reform of EU Cohesion Policy look like?
5)
an online survey among ESIF Managing Authorities in all member states (target: 50-100 filled-in
questionnaires, broadest possible geographical and ESIF coverage);
a series of structured direct/phone interviews with ESIF managers in different member states (target: 10
interviews).
Conclusions will be drawn against the background of actor-centred research on EU Cohesion Policy
implementation. Recommendations for a more active involvement ESIF Managing Authorities and a more
proportional implementation system will be presented as a result.
44
do not apply the actual amounts of transfers in the regressions, but a dummy variable indicating whether a given
region receives cohesion policy transfers or not, or make strong assumptions about the distribution of resources
which do not correspond to real expenditure at regional level.
The third issue is the link between the econometric analysis and the conclusions for cohesion policy drawn by
these studies. Most of the studies focus on the details of their econometric methodology and on the statistical
robustness of the results. At the same time, the complex economic mechanisms behind these relationships are not
sufficiently investigated nor explained. This leads to oversimplified and sometimes contradictory suggestions for
cohesion policy.
The paper concludes with an assessment of issues that need to be addressed to make future research more
relevant for policy makers. These conclusions might be relevant for the econometric research in the coming years
which will be able to make use of data about cohesion policy transfers in 2007-2013, which will be made available
by the European Commission in 2015.
45
Funds is strict, to contextualize the results of the analysis of the effectiveness of the Structural Funds, a cluster
analysis in which various regional characteristics are considered is performed. At this regard, a first set of variables
is related directly to the Cohesion Policy and/or to the Lisbon Agenda, while another set, the context variables, to
the general economic structure.
The first results show that for the Objective 1 regions, despite the low concentration of funds on human capital,
the returns are positive and strongly significant and last over time. Support to infrastructure, despite the large
amount of resources, is less significant than the previous funds and its effect deeply depends on the characteristics
of the regions to which it is devoted. Finally, support for productive environment shows affect only in industrialized
regions. The reasons of these inhomogeneous findings have to be sought in the allocation of the funds and then in
the failure, or success, to balance the requirements of the cohesion approach and Lisbon Agenda. This
demonstrates that, to exploit the growth potentials of each territory, it is essential to understand deeply its socioeconomic structure to tailor policies with respect to its particular necessities. In this extent, in the new
programming period, to fulfill the Europe 2020 objectives, we need to construct a modus operandi that, looking at
the general policy objectives, has to be flexible enough to fit the needs of each region, starting from its
endogenous potential. This approach requires to do not fall into the paradigm one size fit to all, which is the
easier approach, but surely, as demonstrated, not the most effective.
46
Quantitative problems of strictly financial nature aside, it is worth noting that past programming cycles in
Southern Italy showed also deeper qualitative problems. Such problems arose in each and every cycle of financial
programming plan of the last decade.
Looking at the 2007-2013 cycle, it is commonly shared that delays in financial advancement were firstly caused by
governance weaknesses, in terms of administrative capacity and actuative deficit. Still the same acceleration
in the spending process started in 2012 has not had a relevant positive impact on regional development, because
of general fragmentation and because such projects have not been developed within the framework of a coherent
development strategy.
In the first part of my paper, I explore such argumentations more in details.
The second part is mainly focused on the new programming cycle. The main aim is to understand how a reformed
Cohesion Policy 2014-2020 could promote a better use of funds and a recovery in efficiency and effectiveness of
their interventions in Italian southern regions.
First, it will be crucial to explore the link between EU Economic Governance and Cohesion policy. Under this view,
the paper will highlight the several criticalities of the macroeconomic conditionalities mechanism, especially
from the perspective of Italian less developed regions.
With respect to instruments of the reformed Cohesion policy, strategic questions and analytical weaknesses aside,
remarked by EU Commission observations, the Italian Partnership Agreement is still characterized by a
methodological and theoretical approach. Consequently, most regional operational programmes drafts are
formulated employing a bureaucratic approach and an theoretical scheme, without a clear identification of real
intervention plans. On the other hand, Partnership Agreement, in order to address the main priorities of the
European strategic framework, identifies a wide range of actions (more of 300) which might be a sort of to-dolist. The risk of fragmentation is still present. I think we need a stronger discontinuity in cohesion policies
implementation.
Finally, it is important for my research to understand how the governance reform in Italy, in particular through the
creation of the newly-enacted Cohesion Agency, will play a role in overcoming previous weaknesses in actuative
capacity. Also in the light of the European best practices, I would like to analyze how operational modality of a
Development Agency, which the Italian government is still defining, could work to overcome past weakness.
47
Such projects are inherently risky due to long planning horizons and complex interfaces.
Technology is often not standard.
Decision making and planning are often multi-actor processes with conflicting interests.
Often the project scope or ambition level will change significantly over time.
Statistical evidence shows that such unplanned events are often unaccounted for, leaving budget
contingencies sorely inadequate.
As a consequence, misinformation about costs, benefits, and risks is the norm.
The result is cost overruns and/or benefit shortfalls with a majority of projects.
The paper examines public project management applications in the context of the underlying structure that
adverse dynamics and their application to specific areas for micro-economical level of project management,
synthesizes the policy messages, and provides directions for future research. Public sector project management in
Latvia has become popular in recent years as there are different types of public funding sources available. The
paper describes the public sector polycentric development project management practice in Latvia at microeconomics level. Research is based on project management and planning issues in the frame of implemented and
ongoing projects of EU cohesion policy. The study shows the evaluation of impact factors in public sector projects
of efficiency and sustainability, as well as management practice impact factors to implemented cohesion policy.
Involved institutions should be aware that due to complexity of the system, it is very hard to reconcile top-level
strategic considerations with technical, micro-management issues, whose burdens and problems are well
understood only by the "final beneficiaries" - it is only through such interaction however, that the need as well as
direction of change can be determined.
The research period covers the time period from May 2013 November 2014.
48
municipalities face, at the same time developing also functional links between the surrounding area and the city or
town.
Place-based measures are more and more promoted in the EU regional policy and have a significant contribution to
development of territories. Yet in implementation of place-based support programmes still a number of issues
arise that need further discussions at the EU level. Firstly, how to ensure that as a result of EU funds investments
for territorial development both national and EU goals are met still maintaining the discretion for municipalities
regarding the opportunity to choose priorities for EU funds investments at local level?
Secondly, how to balance public investments in areas that show the best return in terms of highest development
indicators in the country and investments in other areas promoting balanced regional development? One of the
areas with a significant development potential is small and medium-sized urban areas. In the context of discussions
about an EU Urban Agenda Latvia during its presidency is going to emphasize the crucial role of small and mediumsized urban areas in regional development, which has been underestimated in EU policies and studies so far.
Development of small and medium-sized urban areas is closely linked with the overall regional development since
these areas are crucial in providing the necessary availability of job opportunities and services of general interest to
residents of surrounding rural areas, yet they also contribute to development of metropolitan areas being
connected in a joint polycentric network.
Thirdly, it is clear that successful territorial development requires synergy between different sectoral policies as
well as cooperation between different levels of government. Since coordination of public investments in 20072013 has not been sufficiently effective, in the 2014-2020 planning period Latvia is introducing two new policy
coordination tools investment mapping and wider application of territorial principles in implementation of
various EU funded sector support programs. Consequently, another important issue worth discussing and
exchanging good practise at the EU level is: how can the contribution of sector policies to territorial development
be maximised? Which tools are the most effective in strengthening territorial dimension of sector policies and
providing genuine, not formal policy coordination on the ground and what are the preconditions for their success?
This paper is going to discuss the aforementioned issues based on the experience of Latvia from the
implementation of EU funds support in 2007-2013 and preparation of support measures for 2014-2020.
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50
relevant in their sector. Thus, the 'work' with equal opportunities was mostly left to the responsibility of the
Ministry of Social Affairs and Labor, which funded a broad range of competitive projects for NGOs and other actors
while many other authorities continued 'business as usual.' This way a number of NGOs working on similar issues
found themselves competing where they could be cooperating. Using unique data from a recent interim evaluation
of the contribution of EU structural funds to fostering equal opportunities in Lithuania, this paper looks into the
governance aspects of the matter. Although the author was the coordinator and researcher working on this
evaluation, this paper only utilizes the data that has been made publicly available by the Ministry of Finance. Still, a
deeper, academic analysis of the data allows a more critical re-assessment of the findings. How were
responsibilities for implementing equal opportunities distributed? Were inter-ministerial coordination bodies
effective? Finally, can the recent surge of initiatives, funded by EU structural funds, to foster women's
entrepreneurship be attributed to growing awareness of these aspects in other ministries, or to preparations for
the new programming period?
51
a success in the context of cross-border cooperation programme? How can we measure it? How does the local
context affect the successful management of funds?
The paper will use the concept of multi-level governance to provide a framework through which to analyse the
governance structures which underpin the CBC programme. However, as this paper will argue restricting the
analysis to structure of governance fails to capture the complexities evident in the ETC. As such, it is important to
combine a governance analysis with the theory/model of integrated borderland which acknowledges such
variables as: local culture, local political clout, and the socio-economic ties of the border region. Both of these
concepts combined create a framework that captures fuller picture of the programmes relations,
interdependencies and factors all of which impact the cross-border cooperation and must be considered in order
to provide a full insight into the reasons why these programmes can claim to be successful or not.
The paper will present the preliminary findings of on-going research and policy implications for future
programming period. It reveals that various levels of governance differently understand the meaning of successful
cooperation. Important element of the ETC for European Commission is the added value for the European
integration, while national governments like to see more spectacular effects and effective cross-border
cooperation, thus pressure on more effective quantitative evaluations and improved measures showing progress
and purposefulness of this kind of programmes. However, European objectives translated onto national, regional
and local levels begin to be multidirectional, thus hard to capture by standard measures. Initial findings show that
visions of real purpose of CBC differ significantly from European through national and regional/local level which
result in i.e. only formal adoption of partnership principle, lack of sufficient communication between various levels
of governments, ad hoc partnerships and domination of certain actors at particular stages of programmes design
and implementation.
Whilst my research is based on a specific case study of one border region, the findings improve a framework which
can help to assess the ETC in other EU border regions.
52
The net effect of investments co-financed from EU funds on changes to the national accessibility in 2004-2013 was
presented. Relative and absolute changes in accessibility within voivodeships were illustrated with a graph.
Furthermore, authors attempted to evaluate the impact of EU investment on Polands territorial cohesion, using an
indicator of road territorial cohesion. The impact on territorial cohesion is measured using the Potential
Accessibility Dispersion (PAD) index, which takes into account the standard deviation of the potential accessibility
values across municipalities, using the population as the weighting variable. This was followed by a simulation of
changes in national and international accessibility as a result of eight investments within selected case studies.
Conclusions drawn from experience and empirical knowledge gained in the years 2004-2013 are of key importance
for relevant presentation of recommendations. Also, they are important for the most efficient implementation of
EU funds in the subsequent programming period, i.e. in the years 2014-2020. The evolution of national transport
policy in the years of 2004-2014 may be treated as a good prognostic sign for future strategic decisions.
Nevertheless, greater emphasis is needed on policy consistency in the next programming period to overcome the
obstacles to making infrastructure development more cohesion-oriented including the construction of the
comprehensive TEN-T connections or secondary networks, particularly in the peripheral regions.
53
54
Regional development of any region hugely relies on the infrastructure available for ensuring economic
development. The Baltic region is a particular example of substantial development of regional infrastructure by
attracting significant financial resources also from EU funds and programmes.
Since the raising awareness on environmental topics and the fact that most of the European states (particularly in
EU) as one of the funding priorities mark environmental issues as part of sustainable development strategy, one of
the specific issues considered is the impact of the Cohesion policy on developing the regional infrastructure in the
field of environment. Being defined as an EU wide investment priority the sector of environmental infrastructure
frequently faces the issue of efficiency. This issue largely arises from the lack of theoretical and practical concepts
on how the evaluation techniques could achieve rigorous estimations of the investment impact on the state of
environment or other processes. Present paper discusses different aspects of policys evaluation with particular
accent on environmental infrastructure (in this paper particularly in water & wastewater management:
construction of iron removal plants, waste water treatment plants, networks).
Additionally this paper includes discussion on other aspects of development of regional infrastructure such as
energy infrastructure, waste management infrastructure and transport systems.
55
outlines that there is a lack of young specialists in such areas as metalworking, mechanical engineering and
electronics, transport and logistics, life sciences, health care, green technologies, treatment of foods, etc. (IDAL,
2014). It could simply mean that funding is allocated to the solving of problems that are laying on the surface.
Latvian society is aging (Central Statistical Bureau, 2014) and many areas needs new specialists to replace aging
ones. Therefore allocation of Cohesion Funds needs to be more precise and more focused on depth of economy
issues. Some interrelated spheres are already mentioned as priorities of investments in people, i.e. employment,
mobility, education, social inclusion, public administration (European Commission, 2014).
The research gathers and summarizes good examples of the Cohesion funds usage for youth unemployment
reduction in Latvia for years 2009-2014 outlining possible risks of the tendencies. The period of time was chosen to
evaluate the recovery in the field after the economic crises in Latvia in 2009.
56
BALANCING THE DEMANDS OF LOCALISM AND COMPLIANCE: SETTING UP THE NEW ERDF
PROGRAMME IN ENGLAND
Carole Sweetenham, Department of Communities & Local Government, UK
England has a long history of setting up and running ERDF programmes. The new 2014-20 programme has been set
up with several aims: maximum local involvement in how the Fund is used, a tight focus on compliance and
performance, and closer working with the European Social Fund. These perspectives are informed by what we have
learnt from previous rounds of ERDF about what projects have the greatest impact on local growth and are most
likely to deliver. The paper will describe how we have drawn on previous programmes to inform the design of the
new programme, what we hope to achieve and some initial thoughts about how we will monitor and evaluate. It
also reflects on some of the wider lessons for Cohesion policy in 2014-20.
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especially in Central and Eastern Europe (Lang, 2011, 2012). This raises the question of how successful EU Cohesion
Policy is in reducing disparities between the levels of development of the various regions and the backwardness of
the least favoured regions (TFEU, Art. 174). Indeed, aspirations of becoming the most competitive knowledgebased economy in the world (Lisbon Agenda) through smart, inclusive and sustainable growth (EU 2020) seem to
challenge the Social Europe paradigm as the core rationale of Cohesion Policy. Thus, it seems to be an appropriate
moment to ask what the role of EU Cohesion Policy is in the (re-)production of centrality and peripherality in
Europe.
To this end, the paper proposes to understand soft spaces with fuzzy boundaries (Allmendinger & Haughton, 2009;
Haughton, Allmendinger, Counsell, & Vigar, 2010) as policy delivery vehicles that mediate the tensions between
the inclusiveness (Social Europe) and the growth (Competitive Europe) objectives on the discursive level. However,
can these spaces of neoliberal experimentation (Haughton et al., 2013) achieve to resolve the same contradiction
on the empirical level? The aim of this the paper is to indicate the ways in which an overly optimistic logic of
European integration by stealth (Majone, 2005) is producing inconsistent policy paradigms or hegemonic projects
(Jessop, 2002) which are imposing a specific strategic-spatial selectivity (Brenner, 2004) on Cohesion Policy. In
other words, the concentration of funds on certain thematic priorities is expected to lead to a concentration of
funds in particular spaces. The decision to make Cohesion Policy a key delivery mechanism of the Europe 2020
strategy, it is argued, indicates a tendency to refocus Cohesion Policys rationale towards the production of spaces
of global competitiveness. In this sense, the identification of urban regions as the engines of growth by the
European Commission, is in accordance with global city scholars, who perceive urban regions as the new primary
units for capital accumulation on a global scale.
Viewed from the perspective of Stein Rokkans (1999) theory of boundary building and political structuring, soft
spaces with fuzzy boundaries can be understood as being structured by a membership boundary and a territorial
boundary. The relative closedness/fluidity of these boundaries conditions the structuring of the soft space.
Therefore, EU enlargement can be expected to have a discernible structuring effect on the EU governance
architecture in general, and on EU Cohesion Policy in particular.
The paper seeks to tease out the ways in which successive enlargements have impacted on the rationale of EU
Cohesion Policy. To this end, the paper analyses official policy documents and proposes that a paradigmatic change
from a Social Europe to Competitive Europe discourse has occurred. In a subsequent step, a range of soft
spaces with fuzzy boundaries will be analysed to shed light on the ways in which the discursive change is translated
into policy practice and, thus, the (re-)production of centrality and peripherality. The central idea is that Cohesion
Policy can be understood as a form of meta-governance that destabilizes regional development practices at the
national level by injecting soft spaces with fuzzy boundaries, whose logic is geared toward the functioning of the
single market. Cohesion Policy as meta-governance (Jessop 2004), can be understood as a calibrating mechanism in
the management of complexity, plurality, and the tangled hierarchies of existing modes of governance. Likewise,
soft spaces with fuzzy boundaries are understood as meta-governance vehicles that equip the multiplying levels,
arenas and regimes of politics, policy making, and policy implementation (ibis. P. 73) with a certain operational
unity.
The overall intention of the paper is to show how the alignment of EU Cohesion Policy with the objectives of
competitiveness and economic growth (as expressed in the Lisbon Agenda and Europe 2020 Strategy) challenges
the treaty rationale of reducing disparities between regions (TFEU, Art. 174) and translates into the simultaneous
(re-)production of globally competitive spaces and lagging peripheries. In this sense, it is argued that the added
value of Cohesion Policy is increasingly reduced to economic growth with the social equality dimension being
marginalized.
59
shown in the CITIES: Cities of Tomorrow - Investing in Europe conference in February 2014. During the 16 years
which have passed between the two conferences there were many ups and downs and even U-turns in the EU
approach to urban development.
The paper aims to explore one of the last battles in this slow policy development: the raising and partial failure of
the locally lead integrated approach to sustainable urban development. The Commission suggested in the early
2010s Integrated Territorial Investments (ITI), as a new tool to manage minimum 5% of ERDF as earmarked money
for this purpose. ITI was promising from many aspects: to put strategic thinking ahead of project based actions, to
support functional area approaches both on neighbourhood and on city-region level as opposed to the
administrative territories, to push for integration between policy fields, to acknowledge the local/metropolitan
level as direct client in Structural Funds policy (delegation). No wonder that many cities became excited and raised
high expectations towards the post-2014 Structural Funds.
However, the brave proposal of the European Commission for the compulsory application of the ITI has been
watered down substantially by the Member States and the large expectations towards integrated and strategic
planning, supported by joint funding from the most important Structural Funds, turned into frustration on the side
of the cities. The ITI method is very complicated and is aiming for multi-fund financing when the Commission could
not achieve better cooperation between ERDF and ESF. The delegation to the city level was a wish of the EC and EP
but the national and regional level was completely against it. The integrated approach would need strong
regulation but the Commission is in serious delay with documents helping to operationalize ITI.
Although full information about the results of the bargaining between the Commission and the member states
(Partnership Agreements) is still not readily available, it is more and more obvious that the ambitious aim to base
at least a small part of the future EU Cohesion Policy on multi-fund supported integrated development planning
(potentially on functional urban area level) remained an exception instead of becoming the mainstream across EU
countries. Some of the new Member States show promising initiatives to apply the new tools, others however,
especially those where ERDF money is more limited, gave up the battle: in their evaluation they could achieve too
little compared to the enormous complexity required by the regulators.
The paper attempts to address the following research questions:
which are the forerunner countries and cities and which are those lagging behind in the application of the
tools for integrated urban development?
what are the characteristics of the success cases and how different are the others, which can be
considered as missed opportunities from the perspective of delegated integrated urban development?
which institutional levels (cities, regions, national states, the EU Commission, Parliament, Council) are
responsible to what extent to the relatively meagre outcome?
It is the authors hope that such critical analysis of policy processes can contribute to the thinking on integrated
urban development and on the European Urban Agenda in a broader sense.
60
Mendez et al. 2014). In theoretical terms, the paper concentrates on the individual member states absorption
behaviour concerning ERDF and ESF (see Bachtler et al. 2014; Tosun 2014) and the impact of the absorption
performance on changes in youth unemployment level. Since the ESF is tailored more directly towards enhancing
employment, we expect that the ESF absorption performance is more relevant for explaining changes in youth
unemployment levels than ERDF absorption. Empirically, the analysis concentrates absorption behaviour of the EU
member states in two programming periods: 2000-2006 and 2007-2013. The analysis of the time period allows for
assessing more specifically whether ERDF and ESF absorption affected changes in youth unemployment during the
economic and financial crisis (Choudhry et al. 2012). The relationship between fund absorption and youth
unemployment levels is tested by econometric methods while controlling for a whole battery of factors including
education and training, labour market policies, labour market institutions, and a range of socio-economic factors
(OHiggins 2010). The level of analysis is country-years. The data is taken from two projects funded under FP7 on
youth unemployment: CUPESSE (Cultural Pathways to Economic Self-Sufficiency and Entrepreneurship) and STYLE
(Strategic Transitions of Youth Labour in Europe). The innovativeness of the theoretical argument represents the
main contribution of this paper to the literature. The second merit concerns the merging of different strands of
literature, including regional studies, EU studies, comparative public policy, and labour market economics. In terms
of practical implications, the paper will illuminate how coherence policy can promote youth employment.
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The paper will explore to what extent the response of the EU regulation for the new ESIF programming period
towards this challenge, the so-called results orientation, consisting of targets on outputs, counterfactual impact
evaluation and a performance reserve can be expected to contribute to citizen well-being.
Next, the paper will provide an overview of approaches that hold great potential for reorienting ESIF towards
increasing well-being, notably Jocelyne Bourgeons New Synthesis approach as well as Vanguards systems thinking
and finally Human Centered Design approaches such as used by MINDLAB in Denmark.
Finally, the paper will make recommendations as to how ESIF authorities can and should rethink their own systems
within the constraints of the regulations.
63
This paper presents findings from a large scale evaluation of a 130m seven year programme (called Talent Match)
in England which is being funded by the United Kingdom's Big Lottery Fund (the main distributor of Lottery funding
in the UK). The programme runs from 2013 to 2020. The programme differs from approaches seen in many
Structural Funds and national programmes in that it is administered and delivered by civil society organisations
working as part of youth led (18-24 year old) partnerships. The evaluation uses a range of methods including an
extensive monitoring system (collecting far more intensive data on beneficiaries that would be the norm).
The programme is clearly at an early stage. However, it is already providing rich insights into the effectiveness of
different approaches. Three broad points can be made at this stage. The youth-led aspects of the programme have
been found to be the most innovative and challenge in many cases delivery agencies to adopt different
approaches. In particular such youth involvement has led to the redesign of outreach, mentoring and progression
activities in a set of local partnerships. This is seen as a response to traditional failings of delivery models. The
challenge here is whether and how EU funds may be used upon to support youth-led approaches, and indeed
respond to deficits in the participation of young people in labour markets and broader society.
Secondly, the wider effects of the UK government's programme of austerity is that local civil society organisations
are adopting very different positions with respect to local government and other public bodies than they would
have done before the financial crisis. A concern for EU funds here is that for programme delivery to be successful,
funding is required to address these coordination deficits, an area which hitherto may have been a Member State
responsibility.
Thirdly, we have sought to explore intrinsic factors as determinants of youth unemployment. These have primarily
been in the form of established psychological 'wellbeing' measures. What has been striking here have been gaps in
wellbeing of the beneficiary groups compared to national averages. Whilst the interventions have tended to yield
positive interim outcomes in terms of reported wellbeing, there is some evidence that wellbeing for many within
the study group is far more fragile than expected. This raises questions for the role of how EU funds complement
what have traditionally been Member State responsibilities, ostensibly through their primary and secondary
education systems.
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reforms, fiscal stability and investments. The main characteristics of the 2014-2020 reform i.e. focus on the EU
2020 Strategy, result orientation, macroeconomic and ex-ante conditionality introduce a firm set of mutual
linkages between the EU economic governance and cohesion policy, having potential implications for both of them.
The cohesion policy being historically focused on the least developed regions has evolved into an investment policy
for all EU Member States accounting for one third of the EU budget. Its substance is however highly conditioned
and restricted the policy shall function in a sound macroeconomic environment and an appropriate strategic and
institutional framework as well as focus on the relevant priorities rooted in the European Semester process and
reflect the Country Specific Recommendations.
This means that the EU cohesion policy has been tied up to serving higher rank priorities and values than only
reducing disparities. It is both a chance and a risk for the policy, as it is subjected to bargains each time the multiannual financial framework is being negotiated. We periodically experience the attempts to diminish the role of
the cohesion policy by reducing its scope to assist the poorest. For sure this will also be the case for the post 2020
debate and the reformed policy would be equipped with stronger arguments not to be defeated in this battle.
There is also a risk ahead of the cohesion policy. With its traditional features limited the policy may be hijacked by
the overarching objective to boost the EU economy. Constituting one third of the EU budget the cohesion policy is
still only a part of 1 % of the EU GDP and cannot radically change the growth perspectives. Assigning too much
responsibility to cohesion policy might turn to be counterproductive.
Because the relationship between the cohesion policy and economic governance is twofold the expectations shall
lie on both sides. One of possible solutions would be to envisage changing the status of expenditure of cohesion
policy national co-financing into development contributive expenditure and as such not to include it in public
deficit statistics. The reference might be made here to the way the national contributions to the European Stability
Mechanism are treated being an international instrument it does not increase the level of public deficit of
particular Member States. Along these lines the proposals have also been made to launch a new European
investment instrument to mobilise the demand and thus enable the EU to emerge from recession. The cohesion
policy as a crucial EU investment policy shall thus be an important player in the discussions on how to ensure the
relevant conditions for long term and sustainable growth in the EU.
THE BLIND LEADING THE BLIND? - COHESION POLICY AND MACROECONOMIC MODELLING
Janusz Zaleski, Institute of Meteorology and Water Management & Wroclaw Regional Development Agency,
POLAND
Zbigniew Mogia, Wroclaw Regional Development Agency, POLAND
Different macroeconomic models produce different and sometimes contradictory results for Cohesion policy (CP)
impacts and this ambiguity poses two main problems for policy makers and analysts. It creates doubt as to the
robustness of model-based impact analysis in a situation where there are effectively no other tools available to
create policy counter-factual scenarios. And it suggests that we are still searching for better and more robust
models.
With respect to modelling tools, two main modelling approaches have emerged. The first, universalist modelling,
tries to incorporate all extant theoretical knowledge (strict general equilibrium properties, endogenous growth
theory, etc.) and avoids regional specifics. The other, region centric modelling, uses less imposed theory, pays
more attention to how regions actual function, and seeks out more extensive data.
In our paper we present results that derive from both of these modelling approaches and point out some of the
underlying conflicts that arise in their interpretation. RHOMOLO-based results were included in the Sixth Cohesion
Report and is in the universalist school. The Polish regional HERMIN system is in the region centric school.
Both systems have been used to study CP impacts on the 16 Polish NUTS-2 regions and have produced remarkably
different conclusions. RHOMOLO asserts that long-term impacts of 2014-2020 Cohesion policy programmes on
GDP in the most affluent and capital-abundant Polish (e.g. Dolnoslskie, Wielkopolskie, lskie, Maopolskie,
odzkie) are greater than in the poorer regions of Poland. Analysis using the Polish regional HERMIN system
asserts the opposite. This is worrying since theories of regional development suggest that higher investment in
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infrastructure, human capital and R+D should generate greater supply-side effects in regions with lower capital
endowments, other things being equal.
Our research objective is to compare and contrast these two approaches to modelling. We show that even a
theoretically comprehensive and methodologically consistent modelling framework needs to be backed by deep
knowledge of regional specifics. Theory is no substitute for local knowledge. Rather, it is a useful complement. A
theoretically beautiful model system can still produce questionable results.
We identify some crucial modelling assumptions and illustrate them using the example of Polish and Slovak
regions.
RHOMOLO, the main model of DG REGIO, represents a universalist, one-size-fits-all approach which neglects
many important regional specifics. It sends questionable signals to national and regional policy makers. Our
preference is for the region-centric approach which combines adequate theoretical underpinnings with deep
understanding of local characteristics.
We draw general conclusions for the implication of our research for the design and impact analysis of EU Cohesion
Policy and propose how the credibility and robustness of model-based analysis might be improved.
SOCIAL INCLUSION FUNDED BY EUROPE? THE IMPACT OF THE EUROPEAN SOCIAL FUND
ON LOCAL SOCIAL AND EMPLOYMENT POLICIES
Katharina Zimmermann, University of Oldenburg, GERMANY
During the last decades, scholars in Europeanisation research have intensively studied softer forms of
Europeanisation in less regulated fields such as social and employment policies (Lopez-Santana 2009,
Heidenreich/Zeitlin 2009). However, recent studies dealing with these forms of governance show that the EU
impact on member states national social and employment policies is surprisingly low (Graziano 2012).
Nevertheless, since an increasing EU focus on subnational levels can truly be stated, the question arises whether
the multi-level aspect and the relationship between the EU-and the subnational level have been underestimated
within Europeanisation research. Furthermore, EU social- and employment policies have been closely embedded
into a broader governance framework especially in the context of the Lisbon strategy and Europe2020. We will
show in our paper that in this context, a formerly simple and mostly irrelevant distributional tool has turned to
become a conditional and highly relevant financing instrument of EU social and employment policies: the European
Social Fund (ESF). Due to its well-established position in domestic delivery-landscapes, its role for the
implementation of EU social- and employment policies should not be underestimated. However, there is still a lack
of research on the role of EU funding tools and how they shape domestic structures. In order to shed light on this
question, we will conduct a fuzzy-set analysis of impact, usage, problems and incentives of EU social- and
employment policies, transported via the European Social Fund. We do not only aim to identify the empirically
existing types of EU-appearance via the ESF against the backdrop of theoretically derived ideal types, but also to
detect a number of characteristics behind these types. Our analysis is based on the empirical findings in 18 local
cases in six different welfare states: France, Poland, UK, Sweden, Germany and Italy.
Our findings show that both the usage of the ESF and its impact on local social- and employment policies follow a
number of key characteristics which are mainly related to the socio-economic situation of the local entity and its
administrative capacity. Furthermore, we are able to show that the creation of supporting structures to deal with
the procedural requirements of the fund (application, administration), ESF and the building of a project logic (i.e.
monitoring, project planning etc.) are the main elements which are transported with ESF-funding towards local
social and employment policies; while programmatic or substantial impact is often limited. By comparing 18 local
entities in six different EU Member States, the paper contributes strongly to the academic Europeanization
literature, where both research on the local level and on EU structural funding is heavily underrepresented.
Furthermore, the paper also holds a number of interesting policy-related findings for EU policy makers, since it
reveals some of the mechanisms how EU policies and procedures are transported to the local level via the ESF
funding scheme, and identifies potential barriers and enablers of efficient implementation of EU policy objectives.
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68
INDEX
Lopez, 35
MacKenzie, 32
Maniokas, 32
Marlow, 51
McSorley, 33
Medda, 5
Medeiros, 34
Medve-Balint, 34
Mella-Marquez, 35
Mihalic, 36
Mihaylova-Goleminova, 37
Miles, 41
Mogia, 66
Molle, 37
Monfort, 1
Muravska, 2
Natali, 9
Novotny, 38
Nyikos, 38
Olteanu, 39
O'Reilly, 60
Paczoski, 40
Pain, 40
Panova, 41
Pascariu, 12
Patrizia, 15
Perretti, 42
Perucca, 11
Petzold, 43
Pienkowski, 44
Polverari, 1
Pontarollo, 45
Porsche, 13
Provenzano, 46
Pugh, 32
Pulmanis, 47
Raugze, 18, 48
Reinhart, 49
Repeckaite, 50
Richardson, 51
Rivza, 21
Roman-Kamphaus, 51
Rosik, 52
Rubianes, 53
Salazar, 35
Sanderson, 63
Simeon, 54
Speckesser, 60
Spiridonovs, 54
Starineca, 55
Annoni, 1
Bachtler, 1
Baltina, 2, 62
Begg, 1
Belicka, 3
Berkowitz, 3, 44
Brandsma, 3
Bristow, 18
Burakiene, 4
Campbell, 33
Carbonaro, 5
Charles, 1
Clar, 6
Crescenzi, 14
Dahs, 7
Damen, 8
Demidov, 8
Di Anselmo, 9
Dijkstra, 9
Dobrzycka, 10
Fazekas, 20
Fejes, 10
Fratesi, 11
Frunza, 12
Ganau, 13
Giua, 14
Gori, 15
Gorzelak, 16
Graute, 16
Gullo, 24
Haarich, 17
Hawrysz, 17
Healy, 18
Ilgavis, 18, 48
Infelise, 3
Jazwinski, 20
Jensen, 60
Jermolajeva, 21
Jones-Evans, 32
Jouen, 22
Judrupa, 62
Kalman, 22
Karvounis, 24
Kesar, 24
Komornicki, 25, 52
Krasnopjorovs, 26
Kravale, 27
Kroll, 28
Langley, 28
Lasmane, 31
69
Verhelst, 61
Vitola, 62
Wauters, 62
Weidenfeld, 63
Wells, 63
Wilson, 63
Wishlade, 64
Wrona, 65
Zakrzewska, 65
Zaleski, 66
Zaucha, 25
Zimmermann, 67
Zuber, 68
Stathoulia, 56
Stpniak, 52
Surubaru, 57
Sweetenham, 57
Szabo, 58
Telle, 58
Tiganasu, 12
Tiits, 22
Tosics, 59
Tosun, 60
Tth, 20
van der Zwet, 61
Van Hamme, 40
70
71
KN-04-15-035-EN-C
doi (print) : 10.2776/81077
doi (pdf ) : 10.2776/536574