Hübner: “Budget cuts undermine the cohesion policy”

Interview with the chairwoman of the EP Regional development committee
“We are trying to simplify rules, structural funds boost growth. We support minister Barca”

“Further cuts would undermine the all architecture of cohesion policy”, Danuta Hübner, chair of the Regional development committee at the European Parliament, is worried about the possibility that in the next proposal of the  President of the European Council, Herman Van Rompuy, for the long term budget 2014-2020, there will be less money for structural funds. She is one of the negotiators for the next Multiannual Financial Framework (Mff) 2014-2020, “we are trying to simplify rules and reduce red tape” she explains.

When will you know what will be the next proposal?
“We are waiting for the Council to decide, the next meeting will be in January or maybe even later. And this is not good, because cohesion policy is a policy where you need time to prepare programs and project, so the sooner the decision on the budget is made, the better it is.”

In the last summit Council said that they were giving more money to Cohesion funds
“Now, but in the past we already had several cuts. The first proposal of the Commission came in June 2011 and it was already less than the current level (347 billions). Then the Commission this July made a second proposal with some adjustments which cut again. And the Council did cut to in their first proposal. So in the last summit they proposed 10 billions more, but the total was 320 billion euros, still less than the original commission proposal and than the current period. I hope they will not go deeper because that would mean undermine the all architecture of cohesion policy.”

 What can you do now?
“We can only wait to know the next proposal. That because there are 2 kind of negotiations: one is for the money, where it is up to the Council to propose the budget for the period 2014-2020, and the Parliament role is only to accept it or reject it. So now we are working on the second tranche of the negotiations, the one on the “legal framework”, here we are on equal footing. We are discussing a new set of regulations for every policy and a new architecture.”

One of the main changes will be the introduction of Transition regions (per capita Gdp between 75% and 90% of the EU average). Why did you introduced that change?
“We want this new category to solve a problem linked with growth. In the past we had Convergence (regions whose GDP per capita is below 75% of the EU average ) and Competitiveness (regions whose GDP per capita is over 75% of the EU average). Some region who belong to Convergence cannot jump immediately in the first category, where the assistance per capita is 10 times lower. That would create a dramatic situation. So this is a system for fading out, for gradually reducing the intensity of aids for that regions.”

The problem with cohesion funds is that some regions are not able to do projects and they risk to lose money.
“At this stage you don’t have yet full use or an high level of absorption, but it doesn’t mean that by the end of this period (there are still 3 years to use this funds) it will not be higher. We have usually extremely high use of structural funds, the average is 95%. The problem is that at the beginning regions and nations are very slow.  Sometimes it takes years to prepare a project.”

But Italy just used 26% of its funds in 6 years…
“If someone is not using the money that are available this is not correct because we have such strong need to growth. So there is no justification for that, because investments are needed now. But still I repeat, I’m confident that at the and of the period the average will be higher.”

The Italian minister Barca has set up a website for maximum transparency in the use of funds and he moved 9 billion euros which might be lost on new projects.
“My friend Barca came also in the Parliament to explain his plan. We work closely and we strongly support him”

Some regions say that the problem is that there is too much red tape.
“We have to remember that this is public money, so there will always be procedures and controls to be sure that everything is done in the right way, they will never be easy money. But is true that there is a huge potential of simplification of this system. At the European bureaucracy you usually have to add additional bureaucracy at national level. So the simplification should be a tack for everybody, at both level, European and national. We often think how to simplify for managing authorities but not for the final beneficiaries. The real challenge is to make things simpler for the final beneficiaries.”

 How much cohesion policy is important in Europe for growth an jobs?
“I think that it is the major investment policy at European level because is investment in innovation, competitiveness, in better connecting Europe, infrastructure, energy. And that means growth and jobs.”

Cohesion funds combine national and European funds, are you thinking of reducing the national part for nations in difficulties, like you did for Greece?
“When the crisis became stronger it was very clear that co-financing could became a problem because of the budgets cuts at national level, so we emended the policy and we did a special regulation, I was the rapporteur. We allowed for a temporary period to increase by 10 % point the maximum co-financing coming from European budget, and so Greece passed from 85 to 95%. But this policy will never be able to finance projects 100% from European budget because it is based on what we call ‘additionality principle’, it’s a way to complement national investments. The limit for next period will return to 85%. But I don’t exclude that we could have again special measures.”

Alfonso Bianchi