Brussels, 8 January 2018

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Ladies and gentlemen,

We have reached the end of our first day of discussions on the next Multiannual Financial Framework.

It has been an intense exchange, and I would like to start by thanking the European Political Strategy Centre for convening this conference.

On behalf of the Commission, I would also like to thank all the panellists present today, for enriching our debate with their insight and their political experience.

We need to take on board all the actors, all the opinions, all the expertise, to extract the most refined proposal for the next Multiannual Financial Framework.

As explained this morning by Commissioner Oettinger, we need an EU budget, which has the right structure, and the right means, to match our ambitions.

And our ambitions, ladies and gentlemen, cannot be devised in isolation.

Every day our countries, our regions and cities, face persisting social inequalities, industrial change and demographic pressure.

Every day we feel the climate change effects.

Be it Hurricane Irma in September, or forest fires and floods, Europe is likely to be increasingly impacted by extreme-weather events.

Every day brings to our shores thousands of refugees searching for a better life, or plainly searching for life.

I do not intend to shed a gloomy light on what lies ahead of us, but we need to bear in mind, when shaping our budget, all existing parameters.

As discussed in one of the panel debates,

it is about squaring the circle.

With the next Multiannual Financial Framework coming into view, we therefore need to somehow reboot the system, to see what has worked so far, and what needs to be changed.

If we go back to the core of the European project, we can find one essential principle: that building together a prosperous future, in the spirit of solidarity and partnership, will bring peace to Europe.

The ground-breaking invention of the European Union lies in the idea that the socio-economic development of a neighbouring country, region or city, is not a threat, but a guarantee of peace and prosperity.

It is also an opportunity to grow together.

And this has worked indeed.

Our continent has enjoyed an unprecedented period of over seventy years of growth and peace, despite some ups and downs.

On this road to an ever growing European integration, economic, social and territorial cohesion has been a cornerstone.

Cohesion policy, alongside the Single Market and the Eurozone, is an essential element translating the solidarity that binds Europe together.

It ensures that every region, town and village - which means every single citizen – can benefit from the European project.

Without cohesion, inequalities will grow exponentially, leading to divisions and fears that will undermine core European values.

The last years of socio-economic crisis and the new challenges arising have made too many EU citizens doubt the European project.

We need to put their needs and concerns first.

We need to show them that the EU protects and empowers them.

As Georges Thomson said in 1973: "No Community could maintain itself nor have a meaning for the people which belong to it so long as some have very different standards of living and have cause to doubt the common will of all to help each Member to better the conditions of its people".

Our primary task, therefore, is to help Member States, regions and cities address the key challenges I mentioned earlier, and restore faith in our Union.

Ladies and gentlemen, to be up to these challenges, we need to offer member states and regions a framework to design policy mixes, that will effectively bring about economic and social change and help build up resilient regions and cities.

Projects financed by the EU budget have to deliver a lasting, sustainable change in terms of equality of opportunities, quality of life and growth prospects.

And this starts by deepening together the social dimension of the Union, notably by exploring ways to further harmonise citizens' rights in terms of working conditions, education, life-long learning or health care.

I have good hope that the recently adopted European Pillar of Social Rights will provide a solid framework to help us improve social convergence across Europe.

We should also have a more structural approach with regards to innovation, be it technological, industrial or social.

This is, for example, what we have strived to do by promoting smart specialisation strategies through cohesion policy.

Smart specialisation strategies have been an incentive for reforms, addressing institutional weaknesses in innovation ecosystems.

In many regions, they helped break down silos between administrations, and bring together researchers, businesses, higher-education institutes, public authorities and civil society.

I am convinced that such model can be disseminated across other EU policies, to further stimulate complementarities.

Ladies and gentlemen, our past experience has shown that preparing the ground properly for EU investments is essential.

We have witnessed a number of structural reforms delivered thanks to cohesion policy.

I am convinced that the EU should provide support for the design and implementation of the relevant reforms, as well as specifically for administrative capacity building.

At the same time, Member States and regions should ensure that the strategic and regulatory preconditions are in place.

The right framework conditions are a must to ensure the effectiveness of the policy. This is one area which will require particular attention, as it touches on how the European Semester and country-specific recommendations work.

Besides ensuring, through a long-term approach, the right conditions for effective investment, structural policies should also enable us to respond to unforeseen challenges.

Recent years have made it clear that EU regions will face sudden and new challenges, ranging from the adverse effects of globalisation, climate change to a rapid influx of asylum seekers.

As part of cohesion policy for example, we are exploring the possibility of an unallocated amount, which could help address challenges emerging in the course of the period.

Another option we are exploring for post-2020 is a substantial mid-term review of programmes.

To put it in a nutshell, a successful structural policy should strike the right balance between a responsive approach on the one hand, and a long-term approach on the other; between agility and robustness.

Lastly, I would like to say a few words on result-orientation.

We need to focus more on the objectives and desired results, instead of focusing on formalities, procedures, documents and receipts.

Our citizens want to see and experience tangible results.

That is why simplification is not just a technical issue. Institutions and beneficiaries should concentrate on what co-financed projects will achieve.

Over the years, in many Member States and regions, we have built a solid system that ensures regularity of expenditure.

We can now put more trust in them.

We should build on this; it will allow us to be more ambitious and demanding as regards effectiveness and efficiency.

This result-oriented approach should also apply to the EU budget, with a clear idea of what our priorities are.

Ladies and gentlemen, I have shared with you some reflections on cohesion policy.

You will continue tomorrow to look at other parts of the EU budget.

In this reflection, I think there is one overarching element we should bear in mind.

And this is the overall strategic coherence of all the policies and instruments which will constitute the future EU financial framework.

We cannot afford overlaps, duplications, or even diverging effects, particularly at a time when we will be faced with difficult budgetary choices.

I wish you fruitful discussions tomorrow for the second day and good luck with squaring the circle.

Thank you very much.