European Commission sets out new cohesion policy

In an attempt to support the European Employment Strategy, the European Commission has set out clear funding guidelines for the 2007–2013 cohesion programme. These guidelines specify the parameters within which Member States should work when drawing up and submitting their National Strategic Reference Frameworks.

The recently developed EU cohesion policy represents a financial instrument to support the ‘growth and jobs’ agenda developed by the Lisbon Strategy. A high degree of disparity exists between the growth rates of Member States, with some of the new Member States recording better rates than some of the EU15 countries. Thus, the European Commission is aware that action is required to create an estimated 24 million new jobs along with economic convergence.

The new cohesion policy aims to bolster attempts to make Europe a more attractive place to invest, an area of high growth, competitiveness and innovation, and a place of full employment and higher productivity with more and better jobs. The European Commission hopes that the €308 billion (representing one third of the EU budget) set aside for the 2007–2013 cohesion policy can make a significant impact across the EU Member States. According to Vladimír Špidla, EU Commissioner for Employment, Social Affairs and Equal Opportunities: ‘Our investment today is in our workers, through training to adapt to new technologies, in our education for young people and also for the older generation, and in our support for those who are unemployed to help them to help themselves.’

Promoting growth and better jobs

The regional dimension of the cohesion policy has traditionally focused on infrastructural networks, research and development (R&D) and cofinancing projects in an effort to improve the EU’s economic position However, a specific feature of this new programme is the importance it places on developing human capital. A key aspect of the cohesion policy is to financially support the main pillars of the European Employment Strategy, namely:

• to attract more people into employment, retain them in employment and modernise social protection;

• to improve the adaptability of workers and enterprises, and market flexibility;

• to increase investment in human capital through better education and skills development.

However, such support is far from being unconditional as it requires Member States to adhere strictly to the guidelines developed by the Commission which govern ‘eligible actions and financial resources’.

Guidelines governing more and better jobs

The Commission has spent the last two years developing a set of guidelines designed to be a support mechanism for Member States when drawing up and submitting their National Strategic Reference Frameworks (NSRFs) in order to achieve greater cohesion as well as jobs and growth at national, local and regional levels. In respect of more and better jobs, the main NSRFs should consider the following issues when developing programmes to promote the three main pillars of the European Employment Strategy.

• In terms of attracting more people into employment, retaining them in employment and modernising social protection, legislators have to use reliable national and regional indicators when demonstrating which groups are most at risk of poverty or exclusion. In particular, attention should be more focused on local conditions, which are not always correctly portrayed in regional level statistics. Furthermore, programmes should consider measures that help to break down labour market barriers that prevent and exclude people from entering the labour market. Vulnerable groups in this regard include long-term unemployed people, older workers, people with disabilities and early school leavers; special focus should be directed at low-skilled workers. In particular, programmes need to look at ways of supporting the European Youth Pact, gender mainstreaming and factors which help migrant workers to seek employment and adapt to a new environment.

• To improve the adaptability of workers and enterprises and also market flexibility, programmes must demonstrate objectives to develop actions that promote greater employment flexibility and investment in human capital. Small and medium-sized enterprises (SMEs) should receive particular consideration, as should low-skilled and older workers who need to be assisted in adapting to the changing demands of a modern labour market. Policies should also consider measures to manage restructuring, such as pre-warning systems and the implementation of training support services for employees negatively affected by change. The guidelines also envisage a key role for social partners in the formulation and implementation of such programmes.

• Regarding increased investment in human capital through better education and skills, the cohesion policy states that a priority relating to investment in human capital needs to consider developing ‘appropriate incentives and cost-sharing mechanisms for enterprises, public authorities and individuals’ as well as supporting the development of networks between universities, research and technology bodies, and businesses. In addition, Member States are advised to draw up measures that support education and training when submitting NSRFs, such as policies to reduce the number of early school leavers or to improve the attractiveness of vocational education and training.

Commentary

With the cohesion policy expected to be adopted by the Council of the European Union in the autumn of 2006, this new departure in regional policy could prove an important development that will help to recharge the principles of the Lisbon Strategy. Not only does the policy allocate considerable funding to promote more and better jobs but it also outlines a detailed programme of priorities which Member States are required to consider when drawing up and submitting their NSRFs.

Michael Whittal, Technical University Munich for AWWW GmbH ArbeitsWelt – Working World