PART III - THE EU BUDGET AND THE CONTRIBUTION OF STRUCTURAL POLICIES TO ECONOMIC AND SOCIAL COHESION

2 The contribution of structural policies to economic and social cohesion: results and prospects

2.2 Assessing the effects of Community intervention (1994-99)

The aim here is to assess the results of structural policies over the last programming period. This, however, is inevitably still a preliminary exercise since some of measures will not be completed before the end of 2001 and the results of the ex-post evaluations will not be available before this date. The analysis focuses on the extent to which appropriations for Community intervention have actually been spent, the results achieved both in total and by Objective, the value-added of Community initiatives and the efficiency of the procedures.growth.

Budget implementation

Information on the implementation of the budget for the period 1994 to 1999 gives an indication of the progress achieved, even though a number of programmes have not yet been completed, since payment can be extended up to December 2001 (see Table A.35, in annex ). Up to the end of 1999, the results appear to be satisfactory, in the sense that appropriations amounted to 99% of total support available and payments to 75%. It is the latter, it should be noted, rather than appropriations as such which provides a better guide to the actual implementation of programmes on the ground. Taking the Member States with Objective 1 regions together, with almost all appropriations committed - as statutorily required - overall commitments are in line with the growth of expenditure as budgeted in 1994 in the Community Support Frameworks (CSFs), Single Programming Documents (SPDs) and related programmes. As regards the payment of appropriations, some Member States among the main beneficiaries of the Funds (Spain, Portugal, Ireland, Germany) were well above the EU average at the end of 1999 (78%), while France, Italy, the Netherlands and the UK lagged most significantly behind (at only 67%).

The monitoring systems established in Member States have, however, enabled start-up problems and implementation difficulties to be identified and followed and the measures involved to be reprogrammed in agreement with the Member States concerned.

For the other Objectives, implementation is variable. In the case of Objective 2, a number of programmes, which were only adopted at the end of 1997 or in 1998, could not be satisfactorily implemented in 1999 and, as a result, overall payments were relatively low (60% of the total funds available). Moreover, some 3% of total appropriations for the period (EUR 477.5 million) could not be carried out and, therefore, had to be returned to the Community Budget.

For Objectives 3 and 4, cumulative appropriations were committed in full. Payments amounted to 80% of total funds available for Objective 3, but to only 69% for Objective 4, because of delays in the UK and Italy as well as the innovative nature of a number of measures.

In the case of the agriculture part of Objective 5a, the rate at which appropriations were actually implemented, as reflected in payments, was below that for other Objectives, while for the fishing part, it proved possible to make good the delays experienced in earlier years, so all appropriations were committed and payments amounted to 73% of total funds available. For Objective 5b, there have been persistent delays in payments in a number of Member States, due to complicated implementation procedures (Italy) and the unsatisfactory functioning of regional partnership (Belgium).

For Objective 6, which relates to only two Member States, the situation is very different. Although total appropriations have been committed, payments amounted to only 65% of the funds available in Finland and 54% in Sweden, but this reflects the fact that programmes were not adopted until 1995 when they joined the Union.

The above levels of payment - and, therefore, as noted above, the actual implementation of structural measures - are, in general, satisfactory, especially for Objective 1 and Objective 3 programmes, and are broadly in line with the rates foreseen in the provisions for the various types of assistance.

In the case of the Cohesion Fund, around 92% of appropriations for the period 1993-99 were matched by payments by the end of 1999. Nevertheless, the implementation of projects in 1999 varied considerably from Portugal (85%), at one extreme, to Greece (65%), at the other.

Trends in eligible regions

Analysis of trends in eligible regions reveals an encouraging performance by Objective 1 regions as a whole, but this is less marked for Objectives 2 and 5b regions.

There was some convergence of GDP per head in Objective 1 regions towards the EU average, the level, in PPS terms, in these areas taken together increasing from 63% of the average in 1988 to 70% in 1998, which means that the gap was reduced by a sixth (Graph 33). This, however, conceals significant differences between regions. Some regions have caught up considerably, especially the new German Länder (where GDP per head increased from 37% of the EU average in 1991 to 68% in 1995) and Ireland (where it rose from 64% to 102%), as well as Lisbon, Northern Ireland, Burgenland and Flevoland, where GDP increased from below to above the threshold of 75% of EU GDP over the period. Other regions have experienced little growth or even a decline in GDP per head: in Greece, Central Macedonia (from 63% of the EU average to 60%), Ipeiros (unchanged at 43%), Sterea Ellada (from 72% to 64%), Peloponnese (from 58% to 57%), in Italy, the Mezzogiorno as a whole (from 69% to 68%) and in the UK, Merseyside (from 80% to 75%) and Highlands and Islands (from 83% to 76%).

On the other hand, unemployment in Objective 1 regions remains high (16.6% in 1999 as against 9.2% for the EU as a whole), although along with the EU average rate, it has declined over the past three years (Graph 34). In a number of regions, unemployment is still well above the EU average, especially the Objective 1 regions in Spain (19.3% in 1999, though down from 27% in 1994), the French DOMs (32%), Italy (22.4%) and the new German Länder (16.7%).

These high levels of unemployment go hand in hand with low rates of labour force participation, because of scarce job opportunities and insufficient rates of job creation, even in periods of economic recovery, which means that the gap with the rest of the Union in terms of employment rates (the proportion of working-age population in work) is even wider.

The level of productivity in Objective 1 regions has changed comparatively little relative to that in the rest of the EU, GDP per person employed increasing from 64% of the EU average in 1988 to 67% in 1998. Nevertheless, there were substantial increases in Ireland and the new German Länder.

In general, the performance of regions is closely bound up with the general economic context in which they are developing. The example of Ireland demonstrates what can be achieved with a favourable combination of structural intervention and a sound and stable macroeconomic policy.

For regions in receipt of assistance under Objectives 2 and 5b over the period 1994 to 1999, in which employment was relatively dependent on industry and agriculture, unemployment remained relatively low and stable in the latter, while in Objective 2 areas, it declined by more than the EU average between 1995 and 1999 (by 2.2 percentage points as against 1.3 points). Even though the rate is still slightly higher than EU average, the experience in both these and Objective 5b regions suggests that Community assistance has been beneficial.

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