Volume 44, Number 173,
April-June 2013
Common Agricultural and Cohesion Policy
in the Europe 2020 Strategy
Antonio González Temprano
THE EVOLUTION OF COHESION POLICY ( ...continuation )

In its attempt to reconcile the struggle against economic crisis, increase competitiveness, confront new challenges and reduce internal disparities in the eu, the Europe Strategy 2020 proposes an ambitious reform to cohesion policy, so that it will better contribute to achieving these goals. In this sense, cohesion policy would play a role in economic growth objectives, which are a central focus and backbone of community policy. The priority goal will be to continue reducing territorial income differences and achieve more harmonious growth, but some new items are also presented, such as: extending cohesion policy throughout the entire eu, driving research, innovation and development of human capital in order to increase productivity and competitiveness, and finally, intensifying coordination between cohesion policy and the rest of eu policies in order to increase its effectiveness. Underlying these new items is an idea that encompasses all of them: it is useful to somewhat reduce aid provided to lagging regions and countries and pay greater attention to the productive fabric of the most prosperous and competitive zones, so that they may generate positive effects for the rest.

In light of how cohesion policy has evolved, it can be concluded that the objective of this policy has undergone diverse changes as new challenges have appeared for the eu. As such, these modifications make clear the difficulties the eu has faced over the past decades. It is useful to explain that given the weakened position of Europe in international markets, the following has been decided: to more directly involve cohesion policy in the objective to increase competitiveness, reduce its priorities to prevent it from becoming a jumble of unrelated items, pursue greater efficiency to make its investments more profitable and finally, strengthen territorial cohesion. Despite all this, the central objective of cohesion policy is still to drive growth for the most lagging countries and regions.

THE WEAKENING OF CONVERGENCE POLICY

In the 2007-2013 Financial Framework, appropriations allocated for cohesion policy are grouped under Sub-Heading 1B, Cohesion for Growth and Employment (Table 1). These appropriations reached 347,407 million euros at current prices and represent 35.6% of the Budget, revealing the importance that the eu27 have given to this policy. However, perhaps the most significant factor is that while total spending rose 29.6% in comparison to the 2000-2006 Financial Prospects, spending for cohesion or structural actions grew by 33.1%,4 making it the Sub-Heading that saw the most growth, followed by market spending and direct agriculture payments (330,085 million euros). Based on this data, it would appear, in principle, that in the 2007-2013 cycle, cohesion policy was further strengthened as compared to the 2000-2006 period.

The annual budgets for fiscal years 2007 to 2020 indicate that resources oriented towards structural actions evolve differently from the Financial Framework. Compared to an 11.9% increase in total spending, cohesion appropriations grew by 8.6%, meaning that the percentage share fell from 36% in 2007 to 34.9% in 2010. In the first half of the 2007-2013 Financial Framework, cohesion appropriations experienced a significant increase in absolute terms, but also a substantial percentage drop (Table 2).

Based on the financial tools of cohesion policy in the 2007-2013 Financial Framework,5 the budget structure of this policy is characterized by the predominance of sf, which is true of all previous cycles as well. What is new in the annual budgets for fiscal years 2007 to 2010 is slowed growth of sf (2.2%) as compared to significant expansion of cf (43%). This growth, far above what is forecast in the 2007-2013 Financial Framework, can be explained by a community desire to attend to the national needs of the twelve members incorporated in 2004 and 2007, which all have access to cf because their per capita income is below 90% of the European average.6 Despite this, in 2010, sf represented 79.3% of resources allocated for cohesion policy.

This significant financial effort represented by the growth of cf is also confirmed by linking these appropriations with the basic employment indicator for the eu27 used in distributing resources for structural actions: the beneficiary population. At constant 2004 prices, cf resources by beneficiary population rose to 43.2 euros per capita in the eu15 of 2003 (last period of the eu15), while they rose to 67.6 euros in the eu27 of 2010, if Spain is excluded (in the phasing out period) and to 50.9 euros if Spain is included. It must be emphasized that strengthening cf in the first half of the 2007-2013 Financial Framework relative to the eu15 was accompanied by a particularly interesting factor: cf resources by beneficiary population do not always correspond to the income level of receiving countries, which is not the best way to reduce territorial disparities.

4 For purposes of unifying criteria for 2000-2006 and 2007-2013, cohesion resources in both cycles are defined as those corresponding to sf and cf.

5 In the 2007-2013 Financial Framework, cohesion policy pursued three objectives: Convergence, Regional Competitiveness and Employment and European Territorial Cooperation. Financial instruments used for these policies were as follows: for the Convergence Objective, the erdf, esf and cf; for the Regional Competitiveness and Employment Objective, the erdf and esf; and for the Territorial Cooperation Objective, the erdf.

Published in Mexico, 2012-2017 © D.R. Universidad Nacional Autónoma de México (UNAM).
PROBLEMAS DEL DESARROLLO. REVISTA LATINOAMERICANA DE ECONOMÍA, Volume 49, Number 193, April-June 2018 is a quarterly publication by the Universidad Nacional Autónoma de México, Ciudad Universitaria, Coyoacán, CP 04510, México, D.F. by Instituto de Investigaciones Económicas, Circuito Mario de la Cueva, Ciudad Universitaria, Coyoacán,
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