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Refocusing EU cohesion policy for maximum impact on growth and jobs: The reform in 10 points

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LOGO CE_Vertical_EN_quadriOnce the EU's 2014-2020 budget is confirmed by the European Parliament and member states, cohesion policy will invest €325 billion in Europe's regions and cities to deliver the EU-wide goals of growth and jobs, as well as tackling climate change and energy dependence. This will in turn leverage national and regional resources worth at least €100bn, for an overall expected investment of more than €400bn.

The reform of Cohesion Policy will ensure maxim impact for the investments, adapted to individual needs of regions and cities. Key elements of the reform, if confirmed by Parliament and Council, are:

  1. Investing in all EU regions and adapting the level of support and the national contribution (co-financing rate) to their level of development:
  • Less developed regions (GDP < 75% of EU-27 average)
  • Transition regions (GDP 75% to 90% of EU-27 average)
  • More Developed regions (GDP > 90% of EU-27 average)
  1. Targeting resources at key growth sectors: investments under the European Regional Development Fund (ERDF) will be concentrated on innovation and research, the digital agenda, support for small and medium sized businesses (SMEs) and the low-carbon economy depending on the category of region (Less Developed: 50%, Transition: 60%, and More Developed: 80% ).

On low-carbon economy (energy efficiency and renewables) there are separate obligations to dedicate ERDF resources (Less Developed regions: 12%, Transition and More developed regions: 20%).

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At least 23.1% of the Cohesion Policy budget (i.e. around € 80 billion) will be allocated to investments under the European Social Fund (ESF) to finance training and life-long learning, fight poverty and promote social inclusion, and help people to find a job. Around € 66 billion will be focused on priority Trans-European transport links and key environmental infrastructure projects through the Cohesion Fund.

  1. Fixing clear, transparent, measurable aims and targets for accountability and results: Progress towards these targets will mean additional funds ("performance reserve") are made available to programmes towards the end of the period. Aims and targets should be published for more accountability.
  1. Introducing conditions before funds can be channelled to ensure more effective investments. For example, "smart specialisation" strategies to identify particular assets, business friendly reforms, transport strategies, measures to improve public procurement systems or compliance with environmental laws are necessary preconditions.
  1. Establishing a common strategy for more coordination and less overlap: a Common Strategic Framework provides the basis for better coordination between the European Structural and Investment Funds (ERDF, Cohesion Fund and ESF as the three funds under Cohesion Policy as well as the Rural Development and Fisheries funds). This also links better to other EU instruments such as Horizon 2020 and the Connecting Europe Facility.
  1. Cutting red tape and simplifying the use of EU investments: through a common set of rules for all ESI Funds as well as simpler accounting rules, more targeted reporting demands and more use of digital technology ('e-cohesion').
  1. Enhancing the urban dimension of the policy by earmarking a minimum amount of resources under the ERDF to be spent for integrated projects in cities - on top of other spending in urban areas.
  1. Reinforcing cooperation across borders and making the setting up of more cross-border projects easier. Also to ensure macro-regional strategies like Danube and Baltic Sea are supported by national and regional programmes. ´
  1. Ensuring that the wider economic environment does not erode the impact of EU investments. If necessary, the Commission can ask member states – under the so-called macro-economic conditionality clause - to modify programmes to support key structural reforms or, as a last resort it can suspend funds if economic recommendations are repeatedly and seriously breached.
  1. Encouraging the increased use of financial instruments to give SMEs more support and access to credit. Loans, guarantees and equity/venture capital will be supported by EU funds through common rules for all funds, a broadening of their scope and providing incentives (higher co-financing rates). The emphasis on loans rather than grants should improve project quality and discourage subsidy dependence.

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Kazakh president sets out five priorities for #Kazakhstan’s 'Third Stage of Modernization' 

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In his annual address to the nation, Nursultan Nazarbayev, the president of Kazakhstan, announced five main priorities as part of what he described as “Kazakhstan’s third stage of modernization”. The priorities are aimed at ensuring economic growth and supporting the country to become one of the top 30 most developed countries in the world by 2050.

The five priorities are: Acceleration of technological modernization of the economy, improved business environment, macroeconomic stability, improved quality of human capital and institutional reforms, including improved security and more action to tackle corruption.

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President Nazarbayev said in his annual address: “I am setting the task of ensuring the implementation of the Third Modernisation of Kazakhstan. It is necessary to create a new model of economic growth that will ensure the country's global competitiveness.”

He added: “This modernization is not a plan to combat current global challenges, but a reliable bridge to the future, to meet the objectives of Kazakhstan 2050 Strategy. It will be carried out on the basis of the 100 Concrete Steps Plan of the Nation.”

The Head of State also instructed the Government to developa package of measures for the technological re-equipment of basic industries by 2025.

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The annual address followed a special announcement given by the President last week, in which he set out bold plansto increase the powers of parliament. President Nazarbayev stated that these constitutional reforms are aimed at furthering the democratic development of Kazakhstan, as the Government will be accountable to parliament.

President Nursultan Nazarbayev has proposed a constitutional reform aimed at furthering the democratic development of Kazakhstan. During a special televised address to the nation on 25 January, the President announced a number of functions that would be transferred either to the Government or Parliament. Public discussions on the proposed constitutional reforms will take place for the next month, concluding on 26 February. After this, the reforms will be presented to Parliament.