Technical Assistance for the Capacity Improvement in the Economic and Social Cohesion

Technical Assistance for the Capacity Improvement in the Economic and Social Cohesion (ESC) Policy (Phase II), in Turkey

EUROPEAID: 130083/D/SER/TR

TR2009/0322.01-01/001

COMPONENT IV: TURKEY BETTER PREPARED FOR THE IMPLEMENTATION OF THE EU COHESION POLICY

report on

Alternative strategies

for gradual preparation on the Cohesion Policy

The contents of this publication are the sole responsibility of the Consultant and can in no way be taken to reflect the views of the European Union.

Table of Contents

I.Explanatory note

II.Approach and methodology

III.Comparative analysis of 2007 – 2013 cohesion policy implementation by selected eight member states

1.Legislative framework

2.Institutional Framework

3.Administrative Capacity

4.Programming

5.Monitoring and Evaluation

6.Financial Management and Control

IV.Comparative Tables of the Implementation of the EU Cohesion Policy 2007-2013 by selected EU Member States

Table 1. Overall presentation of the Implementation of the EU Cohesion Policy 2007-2013 by selected EU Member States

Table 2. Most Common Themes in the Operational Programmes 2007-2013 of the selected EU Member States (in percentage of the total ERDF/CF and ESF allocations)

V.RECOMMENDATIONS

Legislative Framework

Institutional Framework

Administrative capacity and Programming

Monitoring and Evaluation

Financial Management and Control

Recommendations for Alternative Strategy for Gradual Preparation for Implementing EU Cohesion Policy Logical Framework Matrix

VI.Annexes

Annex 1: List of Abbreviations

Annex 2: References on information sources

I.Explanatory note

This Document presents the expert assessment and opinion on alternative / possible approaches in implementation of EU Cohesion Policy and Structural Instruments in Turkey.

The task of preparation of “Report on Alternative strategies for gradual preparation on the Cohesion Policy” is performed by the Senior Non-Key Expert on Cohesion Policy.

The required output of the task is delivered with the timeframe initially set up in the approved Work Plan under Project’s Component IV (21st February 2013) – May 2013.

For the purpose of further reference the present document shall be referred to “Alternative Strategies”.

II.Approach and methodology

To fulfill the task the Consultant has performed a Comparative analysis of the Implementation of the EU Cohesion Policy in the period 2007-2013 by selected EU Member States. The main data on which the comparison between the member states is based is presented in a separate table format, part of the present document.

Along with the analysis of the approach followed by the selected member states an expert opinion is provided that would aim to support the Beneficiary to consider alternative strategies in preparing for the EU Cohesion Policy implementation.

Although the analysis is based on the current programming period 2007-2013 the Consultant provides comments and mainly recommendations considering the next financial perspective for the period 2014-2020 and the draft regulations for the EU Cohesion Policy. To support this,the Commission’s opinion and the assessment of the systems and mechanisms in implementing structural instruments by the member states, as provided in the Position papers on the development of partnership agreement and programmes for the period 2014-2020 for each member states (late 2012)[1], were used in the analysis.

As requested in the TOR the comparative analysis is structured in the following six areas:

-I. Legislative Framework;

-II. Institutional Framework;

-III. Administrative Capacity;

-IV. Programming;

-V. Monitoring and evaluation;

-VI. Financial management and control.

For the purpose of the comparative analysis a limited number of member states were selected. A minimum number of 4 and maximum number of 8 member states were considered appropriate for the analysis to illustrate the variety of approaches followed by the counties in the implementation of the EU Cohesion Policy 2007-2013.

The optimal number of 8 out of 27 member states was considered of a benefit for the analysis of the approach and achievements of member states in the required six areas (as stated above) while implementing the EU Cohesion policy.

To ensure on one side better comparison between the countries as size of territory, population, number of statistical regions at NUTS 2 level – used for the purpose of EU Cohesion Policy, four member states have been found suitable – Germany, France, Italy and Spain.

All of these countries are part of the so called “old” member states. It is important at this early stage to point out that these member states have extensive experience in implementing EU Cohesion Policy with the support of Structural Instruments – ERDF, ESF and Cohesion Funds – more than 20 years of experience. Furthermore, all of them still have regions that fall under the Objective 1 “Convergence”[2], although those regions are the smaller part of the country’s regions.

On the other side as all regions in Turkey would have been under Objective 1 “Convergence” and it would be for the first time for Turkey to implement in real terms EU Cohesion policy. For these reasons four “Convergence” member states were selected to complement analysis and be a basis for comparison with the four “old” member states, namely: Poland, Romania, Hungary and Czech Republic – all of them “new” member states[3].

These four countries could hardly be compared with Turkey in the light of the above-mentioned criteria but their inclusion in the analysis is due to the fact that all of them are centrally managed – no legislative, administrative and fiscal autonomy of the regions, which is comparable with Turkey.

The comparison within the six areas required is done based on:

Centralized vs. Decentralized management of the country;

Big vs. Small countries (as territory and population);

“Old” vs. “New” member states;

“Convergence” vs. “Competitiveness and Employment”[4] objective countries.

It is to be noted, that not all four comparisons could be done within each of the six areas but to the extent it is possible and relevant for the analysis.

The most important and relevant for Turkey comments and opinion of the SNKE on Cohesion Policy are presented in a separate chapter of this document following to the structure of the six key areas:

-I. Legislative Framework;

-II. Institutional Framework;

-III. Administrative Capacity;

-IV. Programming;

-V. Monitoring and evaluation;

-VI. Financial management and control.

As requested with the ToR the recommendations are complemented with actions/measures, category of importance, timing, responsible parties and resources needed, presented in a separate table “Logical Framework Matrix”.

Due to the fact that at the time of preparation of the present document there are no clear time-table for the preparation for Structural instruments implementation, no indicative date of accession to the EU from which moment onwards it is assumed that Cohesion Policy will be implemented, the timing and respectively the category of recommendations are given with the presumption that the period 2014-2020 will be a period of intensive preparation and testing of the systems and mechanisms for Structural instruments implementation.

In light of the above three categories of importance are used:

High – as soon as possible a decision on the recommendation shall be taken by the responsible authority/ies so the related measures to be considered, planned, financially guaranteed and implemented;

Medium – the responsible authority has to consider adequate actions/measures to be taken without postponing, so the systems and the mechanisms to be tested in advance to the real structural instruments implementation;

Low – the implementation of such measures could be done at a later stage but should be paid the necessary attention by the responsible authority.

The recommendations on the alternative strategies and/or approaches in the preparation for the implementation of Cohesion Policy in Turkey are given based on the assumption that under next programming period 2014-2020 Turkish authorities and administration shall implement preparation activities in line with the applicable strategic guidelines and relevant legislation in place (currently still in draft). It is also assumed that this preparation may take a long period and might be the case that Turkey implement EU Cohesion policy after 2020 – under new programming period.

III.Comparative analysis of 2007 – 2013 cohesion policy implementation by selected eight member states

1.Legislative framework

The legislative framework in all member states, incl. those selected for the analysis – Czech Republic, Hungary, Romania, Poland, Spain, Italy, France and Germany ensures full respect of EU and national legislation, the latter being fully harmonized with the EU directives, namely in the field of rules on competition, the award of public contracts, environmental protection and improvement and on the promotion of equality between men and women.

Special attention shall be given to the public procurement – both legislative frame and the institutional system.

All selected 8 countries have transposed the EU directives into separate specific laws. The legislation covers award procedures used, the rules for publication and time limits for submission of applications and tenders, the rules for qualitative selection and award criteria.

The countries have rules for above the thresholds procurements, which also apply to below the thresholds procurements. In countries as Germany and Romania a separate legislation exists for the purpose.

All countries ensure adequate publicity of the invitations to tenderers – Official Journals and/ or web sides.

A special survey performed in 2010[5] on the national public procurement systems establishes that the institutional system in all member states is almost homogeneous in relation to the allocation of competences for the managing and control of public procurement procedures.

With regards to EU funds management in all selected member states the Contacting Authority – Managing Authority or Intermediate Body is in charge of management and control of public procurement procedures.

France and Italy has recently established a system to provide for legal advices thus supporting the MA and IBs at national and regional/local level for the public procurement procedures. Poland and Hungary have specialized Public Procurement Office to coordinate public procurement policies, incl. providing methodological guidance in general or for the specific cases.

Supervisory bodies exist in all member states – for Italy it is the Court of Auditors, for Poland and Romania it is the Public Procurement Office (government body), and for Czech Republic it is the Office for Protection of competition.

In all “new” member states there is a separate body for non-judicial and administrative review at contractual level for all public funds awards, incl. those with EU funds.

In general, Turkey has to consider the need of well functioning supportive body, as well as supervisory and review bodies, well established with adequate staff and necessary competencies to support Contracting authorities in award of public contracts. Good working relationships between all bodies with responsibility in public procurement are the basis for successful implementation of public procurement procedures.

State Aids System is another crucial part of the legislative framework for all the member states to comply with the EU policy while implementing structural instruments. All member states have designated bodies in charge of notification the EC and appeal of state aids schemes, as well as to monitor and register state aids. Such bodies are directorates / departments in Ministries, mostly of Finance or Economy (Hungary, France, Germany) or Foreign/EU affairs (Spain and Italy). This function is undertaken also by the Offices / Council for protection of competition (Czech Republic, Romania and Poland).

In all member states it is the Contracting Authority that has to ensure full respect of EU and national legislation in the field of state aids.

For this reason it is crucial the Managing Authorities and /or Intermediate Bodies acting as Contracting Authorities for EU funds to be well supported methodologically and be provided with on-going assistance by competent authority so to ensure proper implementation of state aids provisions both at the stage of design of the grant schemes and at the time of implementation of projects.

A well established and operating coordination mechanism is necessary to be in place in advance so at the time of implementing structural instruments for EU Cohesion Policy the methodological support to be provided in time and meeting the required standards for competence and knowledge.

2.Institutional Framework

Three groups of authorities / bodies are in the focus of the present analysis:

Authority with overall responsibility for Cohesion Policy, incl. coordination;

Bodies responsible for the preparation and implementation of structural instruments;

Bodies responsible for financial control over the structural instruments.

Their formal designation is done in the National Strategic Reference Framework for each of the selected member states, with exception of Germany, where the required formal designation is done in the respective Operational Programme. Further to their designation both types of documents – NSRF and OPs in a prescriptive manner specify their tasks and responsibilities (for Germany in OPs only).

For the selected member states it can be noted that 4 of them, namely Romania, Spain, Italy and Germany have appointed Ministry of Economy (and Finance) to be with overall responsibility for EU Cohesion Policy, while the other half – France, Poland, Czech Republic and Hungary have appointed Ministry of Regional Development (or equivalent) for the purpose. Hungary is included in the second group although it is not a ministry, but an Agency with nearly the same responsibilities as a ministry.

Coordination mechanisms at central level, applicable both for programming and for the implementation of Cohesion policy interventions, are put in place under the responsibility of the authority in charge of the Cohesion policy.

The analysis shows that the “new” member states have much better formally established permanent structures and committees to ensure inter-ministerial and inter-institutional coordination. For example, Romania has formally established and functional coordination mechanism incl. regional committees at NUTS 2 level, while at the same time there is one Regional OP managed centrally by the Ministry of Development.

In comparison to that the “old” member states have in place permanently functioning technical working groups and sectoral networks (Italy and Spain) that provide specialized feedback to the coordination committees and their permanent secretariats. This is extremely valuable especially for programming purposes.

In respect of authorities or bodies responsible for the preparation and implementation of the structural instruments the analysis refers to the following:

Body in charge of programming

Managing Authority

Intermediate Body

Certifying Authority

The overall programming – preparation of National Development Plan is done at central level for all the countries, irrespectively of whether the country is centrally managed or fully decentralized. The programming is done by administrative structures in line ministries under the leadership of the Authority responsible for the Cohesion Policy. In all countries the principle of partnership is respected and applied in its full spectrum.

With regard to bodies responsible for preparation and implementation of Structural Instruments there proves to be a great variety in designation of Managing Authorities.

There are countries with one Managing Authority for all OPs – Hungary and Spain. Hungary has 15 OPs (7 of which are Regional OPs) with one single MA – the National Development Agency.

Spain has 45 OPs (38 of which are Regional OPs) with one single MA for ERDF OPs and one single MA for ESF OPs.

The advantage is that this MA has the possibility to concentrate expertise and competence and in this way to avoid inadequate or wrong reaction to problems that appear in the process of management and/or implementation based on lessons learned. Another big advantage is the possibility of unification and simplification of the approach in managing the OPs.

It appears that concentrating all the responsibilities in one single MA could be also a disadvantage due to heavy workload. Both countries each being representative from the ‘new’ and ‘old’ member states tried to minimize the negative effects of such concentration with numerous Intermediate Bodies, assuming that they should tackle the issues on the field both for sectoral / national and regional OPs.

However, the analysis of both countries demonstrates that the number of IBs is going far beyond manageable – Hungary, having some OPs without IBs, keeps implementing OPs, incl. Regional OPs with up to 6 IBs. Spain has more than 150 IBs for all 45 OPs. Taking into account that the IBs in both countries are not just government structures or bodies, but include also state institutes, state owned companies, Regional Development Agencies, NGOs, specialized structures, local authorities, etc., makes it difficult to assume that all processes and relationships are unified following the same pattern – even the opposite, which in addition makes the institutional framework more complicated and may be not so efficient as expected.

On contrary to the approach of a single MA for all OPs is a group of 4 countries – again representative of both ‘new’ and ‘old’ member states – Czech Republic and Romania, and Italy and Germany. In these countries for each OP, including ROPs a separate MA is designated, situated in line ministry (in charge of the respective policy) or in the regional council or administration, once it comes to ROP. The exception here is Romania where the Regional OP is managed centrally by the Ministry of Development.

The advantage in this approach is that MA is specialized with the OP – its specificity in terms of thematic approach and institutional management is expected to be handled in most efficient way and in time, as they are situated where the programme is actually implemented. On the other side this approach suggests variety in management style and documents, which exposes the beneficiary to a high risk if has to deal with more MAs. To mitigate that risk a strong coordination mechanism for implementation purposes is required.

Among the 8 countries, included in the analysis, there are two countries where a combination of the two approaches presented above could be seen. These are Poland and France where in Poland there is on MA for all sectoral / national OPs – it is Ministry of Regional Development – and separate MA for each of 16 Regional OP – the self-governments at NUTS 2 level. In France the situation is nearly the same, although the criteria for single MA is not the geographical coverage of the OP, but the source of financing – there is one MA for all ESF funded OPs (one national and four Regional OPs) and separate MA for all ERDF OPs – regional and multiregional.