AIDE MÉMOIRE

Danish Position on the Future of the EU Cohesion Policy

Denmark continues to regard the European Union cohesion policy as an important element of thesolidarity between the EU member states. Therefore, Denmark concurs with the necessity as setout in the Treaty on the Functioning of the European Union to pursue economic, social and terri-torial cohesion through the operations of the European structural funds as well as to contribute ina targeted manner to the achievement of the Europe 2020 objectives.The European cohesion policy has already achieved important results, notably in furthering thedevelopment of the least prosperous regions of the European Union. Many regions have with thehelp of the structural funds achieved remarkable progress. At the same time, we have to acknowl-edge that there remains amble space for further progress and improvements: According to oneforecast the most successful recipients of structural funds will generate twice as much value fromthe structural funds in comparison with the least successful. In addition, the administrative burdenof implementing structural fund support is often experienced as being heavy and as an impedimentfor progress.In order to address these two issues, Denmark would like to draw the attention to the followingpossible adjustments of the structural funds, which merit further consideration:1. The Europe 2020 strategy as a foundation for new growthThe Europe 2020 strategy aims at generating smart, sustainable, and inclusive growth in the EU.For the Europe 2020 objectives to become effective in the cohesion policy they need to be imple-mented by targeted policies and investment choices, based on the specific circumstances and needsof the individual regions. Concentration and streamlining on a limited number on attainable targetswill be decisive to this regard.2. Result and growth oriented cohesion policyAs the European cohesion policies aim at furthering economic convergence and competitiveness, itwould be warranted to focus more on achieving sustainable results, notably on the influence of aprogramme on growth, employment, and competitiveness. Ideally, this stronger focus should si-multaneously improve the effectiveness of the structural funds and reduce the administrative bur-den of the cohesion policy.Concentration of funding on a limited number of priorities which are based, among others, on theEurope 2020 agenda and the Integrated Guidelines for Economic and Employment policies willimprove the effectiveness and maximise the results. This concentration should also protect the co-hesion policy against unwanted “mission creep”.Comparable and meaningful core indicators have to be developed. Increased transparency aboutthe results of programmes would generate a positive incentive for larger effectiveness of structuralfund programmes.3. Reinforcing SuccessPositive incentives to use the structural funds allocations more effectively should be strengthened.The effectiveness of the structural funds could e. g. be enhanced even further by adjusting the per-formance reserves to consist of 5 % of the allocations under the convergence, regional competi-1

tiveness and employment objectives. Possible adjustments could be considered for regions withrepeatedly poor economic performance. Likewise, it is proposed to consider a not pre-allocatedEuropean competitive project reserve which could inter alia be used to finance new and innovativeprogrammes.4. Co-ordination with other policiesIn implementing the cohesion policy, the priorities of other European policies should be taken intoaccount where relevant. Wherever possible, synergies have to be pursued. Ideally, European poli-cies should be mutually reinforcing. In this context, the particular objectives of the cohesion policyand its place based approach have to be respected. The role of the Social Fund within the cohesionpolicy could be designed to further complementarities, notably with respect to social cohesion.5. Simplifying the administration while maintaining sound financial managementThe European Court of Auditors has highlighted the material errors as regards to the implementa-tion of the cohesion policy. Errors in implementation and administration have to be improvedupon. At the same time member states regard the administration of the EU cohesion policy ascumbersome, requiring considerable resources.Administrative requirements should depend on the track record of the recipient of structural fundsaid. Hence, accounting and control procedures should focus on such programmes where there arereasons to expect problems. The administrative burden for recipients where no problems are ex-pected to occur should be adjusted accordingly. In this context, the benefits of proportional andsimplified rules – e. g. on standardised costs – should be fully exploited.6. Targeted conditionalityMacro-economic imbalances can constitute a hindrance of economic development. Consequently,Denmark supports the considerations to apply the macro-economic conditionality already foreseenwith regards to the cohesion fund on the other structural funds. The phased approach with a num-ber of early warning mechanisms and focus on medium term objectives along the lines discussed inthe van Rompuy taskforce should allow the member states to take corrective measures in due time,thereby ultimately avoiding consequences from the EU-budget.7. Climate change as a horizontal issue and energySince the current structural fund regulations were adopted in 2006, climate change has become anever more important issue. In particular a number of the least prosperous European regions haveshown themselves to be particularly vulnerable to the consequences of climate change like draughtor flooding. Hence, while focusing on economic growth the effects of a programme on the climateshould be taken into account as a horizontal issue during the design of all programmes.Likewise, to the extent that it furthers economic growth in a region or country already entitled toreceive means from cohesion policy, cohesion aid may be used to improve the energy infrastructureand increase energy efficiency. An up to date energy transmission net can reinforce the competi-tiveness of the European Union in the international energy markets. In addition, it will improveupon the security of supply and contribute to the fight against climate change. This will be particu-lar relevant to countries with a deficient energy infrastructure. Furthermore, an effective and intelli-gent transmission network is a precondition for the integration of large amounts of sustainableenergy which is one out of several priorities in the Europe 2020 strategy.