EU budget crucial to encouraging investment

Cohesion policy funds are key to helping member states promote jobs and growth, writes Iskra Mihaylova. 

By Iskra Mihaylova

Iskra Mihaylova (BG, RE) is a shadow rapporteur of the Maximising the Energy Efficiency Potential of Building Stock report

13 Oct 2015

@Iskra_Mihaylova

Cohesion policy has been identified as one of the most effective instruments in financially supporting the Europe 2020 strategy. 

These instruments have become increasingly important following the 2007 financial crisis, remaining a vital source of public investment across Europe. Maximising available resources is of the utmost importance in delivering economic growth.

In many countries, cohesion funding represents more than 60 per cent of the investment budget. 

Cohesion policy funds prevented a total collapse of public investment in many member states during the crisis and played a crucial role in supporting the capacity of member states to promote growth and job opportunities. 

These funds are a key source of financing for the real economy and have made a major contribution to strengthen Greece's economic, social and territorial cohesion. Currently, they play an important role in paving the way for a prosperous future.

The EU budget accounts for around one per cent of the EU's combined gross domestic product or approximately two per cent of public spending across all member states. Though relatively small, it has had a big impact in the period 2007-2013. 

I would like to emphasise the crucial role the budget played in encouraging investment, given that, by supplementing public and private financing at national and international level, its leverage helps growth and promotes economic, social and territorial cohesion in the EU.

The 2016 draft EU budget supports key initiatives such as the energy union, the digital single market and the European agenda for migration. The money will be invested to boost innovation, create jobs, help convergence among member states and regions, deal more effectively with migration and strengthen the role of the EU as a global player. 

The proposal also includes contributions to the investment plan for Europe through the new European fund for strategic investment. 

The EU budget uses cohesion policy to encourage investment in areas such as infrastructure, competitiveness, employment, education, social inclusion. 

It also supports research and innovation through Horizon 2020 and contributes to producing high-quality agricultural products thanks to the common agricultural policy.

It is essential for the budget to include credits sufficient to phase out the backlog of outstanding claims from the past budgetary programming period, which is expected to be about €20bn to the end of 2015. At the same time it must help launch programmes from the new programming period 2014-2020.

In a meeting on 17 September 2015, the parliament's regional development committee (REGI), which I chair, adopted an opinion on the draft EU budget 2016. 

This stressed the need for sufficient resources to support the proper and smooth implementation of both their programmes and their multiannual operation, in order to minimise the risk of a recurrence of the backlog of payments. 

It also demanded a long-term solution for the payment backlog, as any delays in payments increase the burden on local and regional authorities and can impact on all beneficiaries of funding.

In the same meeting, the committee adopted the European Commission's proposal for a regulation amending the common provisions regulation of the European structural and investment funds, to offer extra support for Greece. 

If the country makes best use of available EU funds, €35bn could be available to invest in people and businesses by 2020, providing a powerful additional stimulus.

These specific measures were proposed to boost growth, investment and job creation in Greece by ensuring that the available EU funding is used for investments on the ground and reaches beneficiaries as rapidly as possible. These funds will not solve the short-term liquidity problem that Greece faces, but they will help alleviate the crisis.

We also welcome the commission's proposal for preparatory action, which is open to all member states and is intended to finance capacity development and institution building to support the implementation of reforms identified as priorities.

The REGI committee will closely scrutinise the process of implementation of the specific measures for Greece and will require the Commission to set up a follow-up procedure to keep the European Parliament informed of progress, as well as of the efficient and effective implementation of the cohesion policy programmes.

 

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