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maltatoday WEDNESDAY 18 APRIL 2018 4 Interview This year is the 30th anniversary of the Cohesion policy. What has been the impact and added value of this policy for the European citizen? Is there any area where you think Malta could have invested more EU funds? I was indeed very happy to celebrate the 30th anniversary of Cohesion policy, which to me is the most visible expres- sion of the EU and its added value. The Cohesion policy delivers concrete ben- efits for citizens – it's the human face of the EU as its aim is to improve every- body's lives, to leave nobody behind. Its core mission is anchored in the EU treaty: to foster social, economic and territorial cohesion and reduce develop- ment gaps. While keeping its original raison d'être, it has grown into a modern, people-centred investment policy, which gives every EU territory the means to grow and capitalise on its own strengths and talents. The tens of thousands of projects it has co-financed serve as many examples of the policy's positive impact but I believe it has best demonstrated its true poten- tial during the recent economic crisis. As Member States drastically cut public investments, the Cohesion policy was a major source of investments and a real safety net which created 1.2 million jobs in the EU – about one third of all jobs created in the EU over that period, and supported over 500,000 small and medi- um-sized businesses and start-ups dur- ing these tough times. Because this revamped policy will be judged on its results, I encourage Malta to make the best and swiftest use of the funds. Malta is doing very well in this regard so far, with many important and emblematic projects having seen the light of day with EU funds, such as the Mater Dei Hospital Oncology Centre or the Malta Life Sciences Park. Now ef- forts need to be sustained to accelerate implementation. The European Commission is currently spearheading the discussion on the next budget of the European Union (Multi- annual Financial Framework - MFF) and a concrete proposal is being prepared for publication on 2 May. How is this expected to impact your portfolio? The next long-term EU budget will lead to intense discussions. Public investment in the EU is still below pre-crisis levels and regions and Member States need even more support to efficiently tackle the most pressing challenges at our door and on the horizon – holding our own in a globalised economy, fighting climate change and managing migration in the long run, to name a few. For my part, I believe Europe needs a strong cohesion policy for all regions, as it is the only "3D policy": we need its economic dimension as it creates jobs and boosts Europe's economy. It also has a strong social dimension, I often say cohesion policy goes where the private sector does not venture, it invests in bet- ter public services, in improved quality of life in poorer areas; and it has a key political dimension, by being the most visible EU policy. All three dimensions combined, it becomes the most powerful answer to the sceptics and those willing to challenge the values and principles that hold us together. You have been quoted as saying that the EU's budget should be simpler and more flexible, and "leave no one behind in this globalised economy". Is the EU living up to your expectations? What reforms or improvements would you like to see introduced? We need fewer, shorter and clearer rules and to show greater flexibility, so we can cater for new developments or emerging needs throughout the next fi- nancial period. We need to simplify the rules as the current complexity not only discourages some to apply for available funding, but complexity is also the num- ber one reason for errors – even though the error rate is really low. Monitoring and auditing could also be made simpler; think that there are four, sometimes five levels of auditing projects in cohesion policy… Maybe we don't need so many. I also believe that Cohesion policy should further support an economic growth that is locally-led and locally- owned; we need a more tailored ap- proach to regional needs. The way we al- locate the funds should better reflect the economic and social disparities in Eu- rope and focuses resources on those re- gions that need them most. This means introducing new indicators besides GDP per capita when deciding on the funds' allocation, to mirror the specific situa- tion of each region. Given the positive economic performance of Malta since the last MFF, as well as the prospect of Brexit, there is a growing possibility that Malta will no longer be a net beneficiary of EU Funds but will become a net contributor. What are your expectations in this regard? I have never liked the dichotomy be- tween "net contributors" and "net ben- eficiaries". When it comes to cohesion policy, to me, everyone is a beneficiary. Thanks to this policy, regions and cit- ies are in constant and direct dialogue with the EU, in a special partnership that helps them bring their citizens' concerns or their specific development needs onto the European stage. Now, it is too early to paint a precise picture of what the future cohesion pol- icy will look like and to mention figures. But as I said, I will defend a policy that is further tailored to regional' specifici- ties and needs, especially by keeping on helping them identify their key assets on which to build local growth strategies, with the aim to embrace innovation, de- carbonisation, digitisation, and to devel- op the skills needed for the future. There are some who argue that the EU Cohesion policy has not lived up to its raison d'etre, that decades of integration and billions of Euros' worth of EU investment have created only limited political and economic cohesion in Europe. What more can the EU do? And should it? The EU cohesion policy has been a life- line and a major source of public invest- ments in many Member States, reaching up to half of all public investments in some of them. One has to put things in perspective: cohesion policy amounts to a mere 0.3% of the combined GNI of Member States; it would not be right to expect it to solve all problems by itself! Quite the contra- ry: if you look at how it has transformed virtually every Member State with such limited resources (compared to nation- al budgets), I would argue it has done a great job! Having said that, we can do better of course, always. One way to make it even more efficient is to help local and regional administrations improve their capacity to manage EU funds, to build pipelines of solid and mature projects. This is why, since the beginning of my mandate, I have a launched a series of initiatives designed to improve the way Member States and regions manage and invest cohesion policy funds because – and I say it often – this is as important as the money itself. What's the impact of this policy for a small island like Gozo which, despite its limitations and isolation, does not benefit from the status of a separate region? I am very much aware of the challenges the island of Gozo is facing. I look for- ward to going on the ground and see- ing for myself how the Cohesion policy concretely participates to improving the citizens' everyday lives there, by visiting the Xewkija industrial Park for instance. Because of the significant wealth dis- parities between Malta and Gozo, your country is dedicating 10% of its EU allo- cations to the island in the current finan- cial period – which is a significant part of Malta's Cohesion policy envelope. How could Malta use EFSI funds should it become a net contributor in the next financial period? I have always encouraged synergies between EU funds, especially between cohesion policy funds (which include the European Social Fund) and the Eu- ropean Fund for Strategic Investments, or EFSI, the heart of President Juncker's Investment Plan. These funds are of different nature and rationale but they can and should be used together where it makes sense – for prom- ising projects that private investors might consider too risky in the first stages, for example. I'm convinced the next long- term EU budget will provide more op- portunities for synergies between these instruments. In the meantime I would en- courage you to further explore possibili- ties to use the EFSI for infrastructure or innovation projects and to support small and medium-sized businesses. Have the revamped rules for the Cohesion policy helped to improve absorption and citizen support? Or do they run the risk of penalising regions for economic conditions over which they might have little control? The rules for the 2014-2020 cohesion policy introduced a number of important changes, especially an increased focus on the results and performance of EU investments and on making sure these investments could take place in business- friendly environments, in order for their impact to be maximal – that was the idea behind these new forms of conditionality. Last year, a first assessment of the new preconditions for successful investments – the so-called "ex-ante conditionalities" – showed that they proved to be a pow- erful incentive for Member States and regions to carry out reforms which would have otherwise been delayed or not neces- sarily implemented. By linking EU funds to the implementation of key structural changes, we have not only contributed to guaranteeing sound public investments, but we are also improving quality of life across the EU, while setting the right con- ditions for growth and jobs creation. More than ever, I am convinced that the Cohesion policy cannot operate in isolation from the wider economic con- text. This is why I believe the link with structural reforms will be strengthened in the post 2020 period, and that we need to find positive ways to incentivise re- forms through the Cohesion policy. The EU's Cohesion policy and its relevance to the citizen As the European Union celebrates the 30th anniversary of its Cohesion policy, PAUL COCKS spoke to Corina Cretu, EU Commissioner for Regional policy, on the policy's success and shortcomings and how Malta could benefit further from a revamped system