Examiners offer suggestions for enhancing the efficacy of forthcoming EU unity strategy
Rebooting EU Cohesion Policy: Insights for a More Effective Future
Cohesion policy snags approximately one third of the EU's budgetEU auditors dissect shortcomings in the design and implementation of the policy and the post-pandemic recovery pot (RRF)The future cohesion funds could yield superior results and added value for EU regions
The European Court of Auditors (ECA) offers a roadmap for modernizing the EU's cohesion policy, addressing lessons learned from its historic challenges and the RRF.
Since its inception in 1989, EU cohesion policy has pumped over €1 trillion into regional development, with an additional €400 billion earmarked until 2027. However, this mammoth policy has faced its fair share of challenges, from uneven convergence between regions to overly complex rules and insufficient performance monitoring. In light of these concerns, the ECA has published a review, offering invaluable insights to help the EU create a stronger, more effective cohesion policy when the next round begins in 2028.
"Cohesion policy represents the backbone of EU investment and integration, but its implementation is less than perfect," asserts Alejandro Blanco Fernandez, the ECA Member responsible for the review. "As discussions on the shape of cohesion post-2027 progress, our review provides essential takeaways from the past and offers suggestions on how this knowledge should shape the design, execution, governance, and oversight of the policy in the future."
Among the key factors that have hampered the policy's success, the ECA highlights its increasing scope and the frequent use of funds to address exceptional situations. While flexibility is crucial, the auditors caution against diversion from the primary goal of reducing regional disparities. They stress the importance of tailoring the aims of the future cohesion policy to each region's developmental needs and maintaining a focus on strengthening economic and social convergence.
In the past, implementation of cohesion policy has prioritized performance, although with limited success. Thus, supporting national and regional reforms to enhance the efficiency and effectiveness of EU-funded investments may be prudent. Furthermore, the EU auditors have consistently emphasized the need for robust performance monitoring and evaluation to facilitate evidence-based policymaking.
Ensuring timely spending of cohesion funds is another issue the ECA raises, suggesting early adoption of the legislative framework for quicker programming, adequate prefinancing, and leveraging synergies with other EU instruments. Complexity within the regulatory framework and administrative processes are also called into question, with the auditors advocating for simpler, more efficient management while maintaining transparency and accountability.
The auditors underscore the importance of addressing the shortcomings found in the RRF, if a performance-based funding model is to be applied to cohesion policy. To that end, they stress the need to enhance transparency, accountability, and effective mechanisms for recovering misused funds.
Understanding Cohesion Policy
Cohesion policy is enshrined in Articles 174-178 of the Treaty on the Functioning of the European Union, aiming to promote balanced development across the EU by reinforcing economic, social, and territorial cohesion and reducing disparities between regions. The interplay between the European Commission and over 400 national and regional authorities in member states governs the management of cohesion policy.
Moving Forward
The ECA's review, titled "The Evolution of EU Cohesion Policy: Lessons from Yesteryears," is available on the ECA website. Rather than an audit report, it comprises a compilation of previously published ECA audits, reviews, and opinions on various aspects of cohesion policy implementation, comparing them to conclusions drawn about the RRF.
For more information, contact the ECA press office at [email protected].
Key Insights for Modernizing EU Cohesion Policy
- Focus on strategic objectives and performance by building robust performance frameworks, using reliable data, and elucidating EU-added value clearly;
- Increase flexibility in programming funds to adapt allocations and respond to changing circumstances, without compromising predictability or proportionality;
- Prioritize timely implementation of programs to achieve objectives within the planned timeframe;
- Streamline and simplify the regulatory framework and administrative processes to improve fund management efficiency, without compromising transparency or accountability;
- Ensure strong oversight and clear accountability mechanisms to safeguard EU financial interests and maintain trust in cohesion policy spending;
- Link funds to long-term structural reforms and rule of law principles to align funding with broader governance and reform objectives;
- Draw on experiences such as the RRF to incorporate best practices in performance-based funding and advance methods for measuring investment mobilization and added financial value.
These elements collectively aim to create a more targeted, responsive, transparent, and impact-driven cohesion policy, while maintaining accountability and ensuring efficient fund management. The ultimate goal is to make the policy better equipped to tackle current and future challenges while ensuring a brighter future for EU regions.
"To create a more effective future for the European Union's cohesion policy, it is essential to focus on the financial aspects of regional development by incorporating robust performance frameworks and increasing flexibility in the allocation of funds without compromising performance."
"For the post-2027 cohesion policy, it is critical to streamline and simplify the regulatory framework and administrative processes, ensuring strong oversight and accountability mechanisms to maintain transparency and trust in cohesion policy spending."
