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ECA at NIK on the EU Cohesion Policy after 2020

The European Commission proposed to allocate 10% less EU budget resources for the Cohesion Policy funding 2021-2027, than in the previous programming period. The next 12 months will be of key importance for the final division of amounts to be distributed to particular states and regions. The European Court of Auditors has recently published a special Rapid case review on this matter. Dean of Chamber II of the ECA, Iliana Ivanova, responsible for the document, visited the Supreme Audit Office of Poland. In the current programming period Poland is the largest beneficiary of the Cohesion Policy.

In its latest Rapid case review the ECA presented in detail the process during which the Cohesion Policy funding to be distributed to the EU Member States within the next seven-year expenditure plan is determined. Dean of Chamber II of the ECA - Investment for cohesion, growth and inclusion, Iliana Ivanova was responsible for the preparation of the said document.

Dean Ivanova has recently paid an official visit to the Supreme Audit Office of Poland. Iliana Ivanova stressed that Poland is the largest beneficiary of the EU funds, therefore the former and current EU expenditure in Poland is often audited by the ECA and NIK. In 2017 the Office published results of the audit regarding the management of the EU Cohesion Policy funding for 2014-2020. Iliana Ivanova and Krzysztof Kwiatkowski discussed, among others, the findings of the latest ECA review.

- The current year is of key meaning for the next seven-year budget of the European Union. All stakeholders should take conscious decisions, so that he Cohesion Policy brings better results, even despite the limited budget - said Dean Ivanova. - Therefore we explained the complicated allocation process of the Cohesion Policy funding to the Member States. We hope that the document will contribute to a constructive decision on this matter.

Member of the ECA, Iliana Ivanova, at NIK
Member of the ECA, Iliana Ivanova, at NIK

The rapid case review presents how the EU ascribes the Cohesion Policy funding to individual Member States and regions - in order to diminish the discrepancies between the wealthy and the poorer European regions. Amounts proposed for the programming period 2021-2027 were compared with the amounts from the previous period, 2014-2020. The review also includes specific calculations made in course of the allocation process. It does not, however, concern the Brexit-related matters.

- During the conversation with Ms Ivanova I described, how important the Cohesion Policy funding is from Poland’s perspective. I mentioned how many projects were positively assessed by NIK. The meeting was also an occasion to present projects that need to be continued, as well as new investments. Poland as a beneficiary manages the European funds well, to the benefit of the citizens. Therefore, it is so important for us that the financing for Poland in the new budgetary perspective remains high.

The European Commission has proposed for the EU budget 2021-2027 to total EUR 1 279 billion, whereby EUR 373 billion is dedicated to the Cohesion Policy expenditure, which is 10% less than in the previous programming period. The funds are to be granted to the Member States by means of three funds: European Regional Development Fund (ERGF), European Social Fund Plus (ESF+) and the Cohesion Fund.

The amounts ascribed to individual states within the Cohesion Policy 2021-2027 changed, among others because, in comparison with the previous programming period, the level of prosperity of many regions and states either increased or lowered.

The maximum amount of the Cohesion Policy funding for an individual state is by 8% higher than in 2014-2020, and the minimum amount is by 24% lower. These limits prevent too wide discrepancies between the amounts earmarked to individual Member States in the following seven-year programming periods. As in the previous programming periods, ¾ of the total funding was granted to poorer and less developed regions.

For the first time specific amounts ascribed to the Member States were included in the conclusions concerning the next programming period published by the Commission. According to the proposed solutions the Cohesion Policy funding granted to seven states would be higher, in case of six countries it would remain unchanged, and it would be lower in case of 14 states.

A significant factor impacting the division of funds is the changed prosperity level of many regions, which leads to a reclassification of their status. Estonia, Lithuania, and some regions in Czech Republic, Poland, and Bulgaria change from less developed region to transition region status.

The initial allocations will be next negotiated by the EU institutions and the Member States. The European Parliament and the Council are to decide on the proposed allocations for individual Member States within the next 12 months. 

Iliana Ivanova visited Poland with regard to the ECA audit on urban mobility. Congested traffic flow caused by a large number of cars on the streets of the EU cities generates costs in the amount of EUR 110 billion annually, which constitutes over 1% of the Union’s GDP. Therefore, a proper management of this sector, apart from the obvious environmental benefits - urban traffic causes 23% of the CO2 emission from transport - also impacts the productivity of the Union. Thus, the ECA conducts a performance audit in this scope, and the main audit question is ”Whether the EU support effectively influences the improvement of traffic in cities?”.

Meeting at NIK

Having established which part of the seven-year budget should be dedicated to the Cohesion Policy, the Commission ascribes funding to the Member States and regions - from the European Regional Development Fund, European Social Fund Plus and the Cohesion Fund - applying a number of processes based on a particular methodology. Allocation of most funds for states and regions is determined by their relative prosperity.

States and regions may also obtain financial resources on the basis of economic, social and environmental factors, such as unemployment rate or education level. For the first time migration and gas emission are taken into account, however, according to auditors, their impact is limited.

Rapid case reviews - such as the recently published document, are prepared by the ECA to present and organise facts concerning a complex matter or issue. They may also include fact analysis, if necessary.

Rapid case review of the European Court of Auditors ”Allocation of Cohesion policy funding to Member States for 2021-2027” is available at the Court’s website (eca.europa.eu) in 23 EU languages.

Iliana IvanovaIliana Ivanova - Dean of Chamber II, Member of the ECA since 2013 (in 2019 re-elected for the second term of office). Previously MEP at the European Parliament. During her mandate in the European Parliament she was, among others, Vice-Chair of the Committee on Budgetary Control. She has been dealing with cohesion policy and its improvement for many years.

Cohesion policy: The EU’s main investment policy, which aims to reduce economic and social disparities between regions and Member States through promoting job creation, business competitiveness, economic growth, sustainable development, and cross-border and interregional cooperation. It is financed through the European Regional Development Fund (ERDF), the European Social Fund Plus (ESF+) and the Cohesion Fund (CF).

Cohesion policy is one of the most significant areas of European Union (EU) activity, accounting for around a third of its budget. Each Member State is entitled to spend a fixed sum, channelled through different funding mechanisms.

Author: , Date of creation: 2019-05-20 09:56:05