‘No long-term future without relative equality across all Member States’

Younous Omarjee. Source: European Parliament

With 42 members and 38 substitute members, the European Parliament’s Committee on Regional Development (REGI) is among the institution’s largest, and is responsible for preparing legislation and scrutinising the European Commission’s work on cohesion policy. Given the variety of topics addressed by cohesion policy, the complexity of the co-decision procedure and the EU funds involved, this is quite a task, the more so in view of the additional parliamentary work that lies ahead in connection with NextGenerationEU (NGEU). Younous Omarjee, an MEP since 2012, has chaired REGI since 2019. What does he identify as the main cohesion policy issues that will impact the work of his committee, especially in relation to the NGEU, and how does cohesion tie in with the major challenges currently facing the EU? He provides his views and concerns in the following interview.

By Gaston Moonen

Addressing development gaps in EU regions, including on greening

Since July 2019, you have been chairing the REGI Committee, which means dealing with various topics relating to cohesion policy. What does cohesion mean for you? What is the key cohesion topic your committee is currently working on?

Younous Omarjee: Cohesion is Europe’s great convergence and solidarity policy. There are still pronounced development gaps in the EU between more and less wealthy regions. There are still significant differences in GDP and pay. The aim of cohesion policy is to make every possible effort to reduce these disparities in wealth and development. The Treaty on the Functioning of the European Union describes this very well in the section entitled ‘Economic, social and territorial cohesion’, as do the objectives and principles set out in Articles 174–178.

Our REGI committee is currently working on the response to the Eighth Cohesion Report published recently by the European Commission on the launch of a European island agenda, the defence of the cross border dispute resolution mechanism, and the Fit for 55 package. We are also monitoring the implementation of the 2014–2020 programme and the start of the new 2021–2027 programme.

Europe often boasts about its diversity and that differences between Member States and regions are actually part of the fabric that constitutes the EU. At the same time, as you have said, cohesion is aimed at convergence, at enhancing certain regions to bring them to the same level as other regions. How does this relate to this idea of differences and why, in your view, is convergence so important for the EU and its future prospects?

Younous Omarjee: The EU has no long-term future without relative equality across all Member States and regions in terms of development. That is the goal of cohesion, which promotes balanced development throughout the EU in order to lessen discrepancies in development across regions and reduce lagging in the least privileged regions.

The diversity of the EU lies in its cultural and geographical diversity and its diverse habitats. Unequal development and wealth cannot be considered components of diversity, but merely inequality, which we must fight. Equal pay, workers’ rights, equal rights to healthcare and pensions, the reduction of all types of inequality — these are the great battles we will face for decades to come. In the near future, we need to build a Europe where every worker earns a minimum net monthly salary of 1000 euros for a 35-hour week, with the same healthcare and pension rights for everyone.

You are also a Member of the Budgetary Control Committee (CONT). What would you identify as the main difference in the discussions held in the CONT compared with REGI and do you think the two committees can cooperate more, and how?

Younous Omarjee: They do two very different jobs, including with regard to monitoring the implementation of the funds. The CONT committee takes an accounting viewpoint, for all the funds, while the REGI committee focuses more on results and the achievement of objectives, while looking ahead to the new policies to be implemented.

It is always possible to increase cooperation, but the CONT and REGI committees already have very close links. Whenever necessary, Monika Hohlmeier and I hold discussions. We have worked together successfully on the negotiations for the new generation of funds to ensure the effectiveness of a whole series of fund control measures.

Last year you were rapporteur for a report on a new approach to the Atlantic maritime strategy. In this report there are many references to sustainable actions, the blue economy, etc. Do you think the cohesion policies do enough to support the transition foreseen in the Green Deal? Where do you see opportunities to do more?

Younous Omarjee: The new generation of funds needs to achieve more. What we negotiated for 2021–2027 has totally greened cohesion policy, with a mandatory minimum of 30 % of funds going to the green transition, and we introduced the principle of not harming the environment. These are sound principles. Cohesion policy has become the first European pillar of the Green New Deal.

Where we could go further in terms of cohesion is adaptation to climate change. While we have adapted our funds to generate the green investments needed under new cohesion, and are stepping up legislative reform to reduce greenhouse gases, with the Fit for 55 package, there is one substantial component missing — adaptation to climate change. The climate change generated since the first industrial revolution is irreversible. And even if we manage to drastically reduce our emissions in future, we need to adapt to the consequences of climate change yet to come. The EU policies do not make sufficient provision for that, and we are seeing increasingly extreme natural disasters occurring every year. That is why the REGI committee is calling for the creation of a regional climate change adaptation fund that would operate along the same lines as the transition fund or the Youth Investment Fund.

Finding the best possible balance in cohesion policies

Coming back to cohesion policy as such: within your committee there is a lot of attention for policy congruence and policy proposals to improve the effects of cohesion policy. At the same time, it is also an area identified by the ECA as prone to errors, irregularities and even fraud, compared with some other major expenditure areas, and for some years now. What is your major concern on this aspect and what needs to be done, in your view, to really make a change for the better? What role do you foresee for the ECA and auditors generally in such a change?

Younous Omarjee: Errors, irregularities and even fraud do not necessarily mean that a policy is bad. A policy can have all these flaws yet still be excellent, with excellent results. Sound management is a separate requirement. We need to work to reduce these problems and make it possible to achieve our sound management objectives, but this must not hamper the coherence of the policies with cohesion or be detrimental to the objectives of cohesion policy itself.

The European Court of Auditors must also work, through its recommendations, towards simplifying fund management for beneficiaries . A good policy is a policy that succeeds in being balanced across the board. We at the European Parliament consider all aspects and try to find the best possible balance. Your analyses are therefore essential for us.

Cohesion is a shared management policy where there is a lot at stake for Member States, as we can often see also in the multiannual financial framework discussions. And the Council sometimes seems to have different interests from those of the European Parliament. Where do you see those different stakeholders’ interests diverge and align and what is your major concern now from the EP perspective?

Younous Omarjee: Those negotiations are behind us now. They took more than two years’ work, and believe me it was not easy, but we got there in the end. Our positions were initially far apart on numerous issues, but we finally managed to find common ground with compromises all round.

Our current concern is the slow start to this new programme period. Many Member States have not yet concluded their partnership agreements, and seem to be prioritising the recovery plan. We are also very surprised by the Commission’s proposed transfers from cohesion to RepowerEU, which we find inappropriate.

Recovery should not hinder cohesion objectives

What do you see as the main opportunities and challenges for cohesion policy in view of the NGEU initiative and the Recovery and Resilience Facility, whereby an impressive amount of resources, outside the EU budget, are spent on issues which have similar aims to, and sometimes overlapping objectives with, cohesion policy. And from a public scrutiny point of view, what will be the key activities of your committee regarding the RRF? What do you see as the main challenge from an accountability standpoint, in view of the different responsibilities of the Commission, Member States and Council regarding the final allocation of RRF money?

Younous Omarjee: That really is the cardinal question. The NGEU was created on the basis of Article 175 TFEU, so the recovery plan must target the cohesion objectives set in Article 174. That is our expectation, as the Treaties require it of both the Commission and the Member States. What is more, I would call on the European Court of Auditors to assess this. As the recovery plan must not hinder cohesion objectives, the less developed regions must remain the priority, as they will not otherwise close the development gap.

I find it strange that the European Commission is planning to transfer such substantial amounts from the European budget and the multiannual financial framework to the recovery plan (RepowerEU), which as you have emphasised, is outside the EU budget. It is highly problematic. We do not want all that to mark the beginning of the renationalisation of EU policies.

What role would you like the ECA to have in this accountability chain regarding NGEU/RRF expenditure, what do you expect from the ECA in this respect? Do you foresee a spillover effect of the RRF performance criteria into cohesion policies and would your committee welcome a more performance oriented accountability process with less focus on compliance issues?

Younous Omarjee: What we expect from the European Court of Auditors is its valuable expertise. All your assessments are important and offer added value. You are best placed to know what you should do. Where your advice would be important for us is on how to simplify cohesion policy management for small project owners, particularly SMEs and local authorities .

With regard to your second question, I believe this is not necessarily a matter of performance, but the evaluation of cohesion policy in terms of the objectives it must achieve is extremely important, just as important as compliance. These are two different evaluations.

With the war going on in Ukraine, European unity and the values and interests the EU stands for have taken on a new dimension and new impulses. And we often see that a major crisis in Europe (financial crisis, the pandemic) can have a shock effect on EU actions and policy initiatives. How do you expect this war in the east of Europe to affect the work of your committee, the kind of proposals to be launched by your committee members, or from the Commission, tying into these developments?

Younous Omarjee: The consequences for the citizens, Member States, regions and cities will be huge. The inflation and insecurity created do not bode well. Our committee has already played its part and, together with Commissioner Elisa Ferreira, we have pushed through CARE and CARE+ urgently. We cannot take more from cohesion, as otherwise the long-term cohesion objectives will be impacted in the long run, which would also be problematic. We hope there will be a new fund for the purpose, an NGEU+; we are ready to take that step, but it is up to the Council to decide on it through new joint financing.

This war will affect everything, everyone and all our policies. Russia and its leader Vladimir Putin must stop this unjustifiable and unjustified war. The Russians themselves are paying the price, Europeans are paying the price, the whole world is paying the price. Humanity is duty-bound to raise itself above that level. These wars only foster under-development; they are wars in which everyone loses. Russia must retreat, and its withdrawal from Ukraine will be its salvation.

This article was first published on the 1/2022 issue of the ECA Journal. The contents of the interviews and the articles are the sole responsibility of the interviewees and authors and do not necessarily reflect the opinion of the European Court of Auditors.

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