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A Policy for Europe's Regions 2007-2013
In 2007, the policy for the new period (2007-2013) of EU regional development was launched. The policy is as wide-ranging in its goals as the regions it represents and it is as far-reaching as the land and sea confines it projects to address. This article underlines significant aspects of this policy as well as how these reflect Malta’s objectives and our nation-wide efforts to continue the modernization initiative that is far from completion.
The objectives of the new regional policy are laudable, aiming to address quality of life disparities in Europe which highlight the fact that the richest state in the EU, Luxembourg is seven times wealthier than Romania the poorest member state. The policy aims to be cohesive and offers solidarity across disparate regions trying to find common solutions to challenges that afflict the EU and indeed the developed world: globalization, external immigration, climate change, population ageing and the need for sustainable energy supply.
The crux of the EU regional policy for 2007-2013 is growth and jobs for European regions and cities. A total investment budget of 347.4 billion Euros has been approved by the Commission for this phase of the EU lifespan. It is estimated that 2 million jobs and a 6% growth in new member states will be achieved through this funding. |
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Malta’s Objectives and Targets
Malta main focus of programmes is aimed at sustaining a growing knowledge-based competitive economy; improving attractiveness and quality of life; investing in human capital and addressing Gozo’s regional distinctiveness. Amongst its 2007-2013 targets are an increase in GDP/capita from 69.2% (in relation to EU average) to 74%. Increase nominal exports by 4% and increase employment rate from 54.3% in 2005 to 57% in 2013.
Maltese citizens are being made aware of the opportunities and benefits of EU structural and cohesion funds on a regular basis. Members states and regions have an obligation to provide information on the programmes financed by the funds and to publish all final beneficiaries, projects and the amounts granted. The designated Maltese Managing Authority is the Planning and Priorities Coordination Division in the Office of the Prime Minister. |
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Member States Obligations
EU rules state that to ensure better programme implementation the following obligations must be met: Communication plan - For every Operational Programme, information must be divulged comprising a strategy, definition of target groups, planned information and communication measures and an indicative budget including the government departments responsible for the plan and how it will be assessed.
Minimum requirements – At least one major information campaign at programme launch and one in each year of its subsequent implementation. A list of final beneficiaries and the erection of billboards and displays on project sites.
Networking – Efforts must be made between member states and regions on information and communication actions in order to achieve better integration and to learn from best practices. |
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Cohesion and structural funding initiatives
Under this tranche of cohesion and structural funding, a wide range of objectives will be addressed. Below are a few examples of the initiatives which will be addressed in the months and years ahead. |
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Attracting Foreign Investment
A key objective of the cohesion policy is supporting SMEs and attracting outside investment. Around 1.2 million enterprises are created in the EU every year, yet only half of them survive the first five years. Structural and cohesion funds will place particular emphasis on supporting the creation and modernization of SMEs. The latter represent the core of the European economy accounting for 99% of businesses in the EU. Micro-enterprises (<10 employees) represent the biggest segment of the labour market in Italy (47%) and Poland (41%). New funding instruments such as Jeremie (vide below) will help address perennial problems of accessing capital and knowledge.
A key challenge for new member states will be to continue attracting investments from foreign countries. Recent successes in Malta to attract foreign investment in the pharmaceuticals and ICT sectors include low corporate taxation, English language speaking and the availability of competitively priced skilled workers. Nevertheless cohesion funding aims to make a difference in other areas that improve a region’s attractiveness – accessibility, education of the workforce, information and communication technologies, infrastructure and spending on research and innovation. |
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Sound Financial Management
Three instruments have been developed by the European Commission together with the European Investment Bank (EIB), the European Bank for Reconstruction and Development (EBRD) and the Council of Europe Bank (CEB). Through these financial instruments technical assistance will be offered in the management of large projects or financial engineering, ensuring that the investments maintain their impact and contribute to the long-term development of regions.
The three new instruments are:
JASPERS (Joint Assistance in Supporting Projects in European Regions) – Projects falling under this instrument are transport and energy infrastructure projects and energy efficiency and renewable energy initiatives, particularly in the assessment of public-private partnerships.
JEREMIE (Joint European Resources for Micro to Medium Enterprises) – Products to be developed under this instrument include equity, venture capital, guarantees, loans and technical assistance which allow a multiplier effect of the EU funds by using revolving financial products instead of grants. Tailored schemes will be designed for SMEs in all sectors in order to address access to financial capital.
JESSICA (Joint European Support for Sustainable Investment in City Areas) – This instrument will promote sustainable investment in urban projects through the transfer of resources from operational programmes and co-financing can come from local councils, banks, pension funds or investment funds.
These three new instruments can be a way forward of accelerating the modernisation process of the Maltese Islands. The current spate of large real estate investment projects (such as Tigne and Manoel Island) and the Smart City Project are showing that the skills set and investors are already in place to realize such projects. With these financial instruments, community projects can be realized through public-private partnerships which are necessary for developing the competitive edge for Malta and assisting it in claiming its place in the knowledge-based driven EU and global markets. |
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Innovating Regions and Cities
A knowledge driven economy cannot develop without a focused and continuous effort that channels funding that aims to create an environment that encourages research, development and innovation. Malta as in many of the smaller member states, programmes include innovation alongside other priorities such as infrastructure development. However this does not imply that there is less emphasis on innovation, as testified for example, by the allocation of funding for information and communication technologies. Under innovation, actions will focus on four areas: strengthening cooperation, both among businesses and between businesses and public research institutions through trans-regional clusters. The second priority is to support research and innovation in small and medium-sized enterprises. The third is to boost regional cross-border and transnational collaboration and the final priority is to strengthen capacity-building infrastructure and human capital in areas with significant growth potential. |
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Making Europe Work
Cohesion policy ultimately has to have an impact on European citizens, improving their quality of life, creating better jobs and spurring growth in the EU member states. Through cohesion and structural funding, a shift has occurred towards growth-enhancing investments in EU member states which have become a success story, such as, Ireland. The latter has since 1995, reached 145% of average GDP/head by 2005. The effect in new member states is expected to manifest itself over time, yet growth rates in the three Baltic States have doubled in the decade 1995-2005.
In conclusion, the impact of structural and cohesion funding, should have a beneficial effect on infrastructures, human capital and the community at large through the implementation of cohesion policy which aims to reduce pollution and increase growth and jobs in EU cities and regions. The effect in Malta should reflect what’s happening and will happen in the EU member states. Whether the impact will be greater or lesser of the EU average remains to be seen, it is up to us to ensure that we can formulate good projects that have wide-ranging and far-reaching effects for the greater benefit of Malta and its citizens. |
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