The EU's Cohesion Policy

The European Commission has recently proposed two measures to make it easier for on crisis-hit Member States to use much needed European funds from the EU’s cohesion policy budget.

These measures are an extension of original proposals adopted in 2011, which saw a temporary increase of EU co-financing for Ireland, Hungary, Latvia, Greece, Portugal and Romania, who were seen as especially hard-hit by the economic crisis. The current measures proposed by the Commission would aim to further ease pressure on a number of selected countries in the hope of strengthening their structural reform and investment efforts. However, these measures do not represent new or additional funding to Member States struggling to makes ends meet; rather it allows an earlier reimbursement of funds already committed under EU’s share of the cohesion policy budget.

The first of the new measures will see an increase in the share of the EU’s contribution to cohesion policy investments in Greece, Cyprus and Portugal and will allow for a lower national share, which has been increasingly difficult to ensure in the current economic climate. This will likely to deliver more quickly 500 million Euro of growth promoting investments to the three countries, thereby easing the strain on national budgets.

The second measure is focused on Romania and Slovakia and aims to give the two countries more time to spend cohesion policy money. Usually the money received from the EU by Member States must be spent within two or three years, depending on the country. The easing of these time constraints gives the two countries more flexibility to spend and claim back EU money, thereby reducing the risk of losing funds. It will also allow for better selection and implementation of strategic projects, especially for Romania which has problems in terms of the absorption of EU funds.

“The tailor-made measures will help these countries make use of much needed investments: to create sustainable jobs (…), to help young people into work and to encourage innovation and research. This will be not just be for the good of the countries involved but for Europe as a whole. But I should add that while this proposal does offer breathing space it cannot be a substitute for reform and acceleration in using the funds," emphasised Johannes Hahn, the EU Commissioner for Regional Policy.

The proposal will now be sent to the European Parliament and the EU's Council of Ministers for adoption.