BUSINESS

EU’s regional policy chief signals increase in funding

EVGENIA TZORTZI

EU Commissioner for Regional Policy Corina Cretu, seen in a file photo. ‘Time is pressing and the Greek real economy needs more investments,’ she says.

TAGS: Economy, EU, Interview

Although Greece has one of the highest absorption rates of European Union funds, “time is pressing and the Greek real economy needs more investments,” Regional Policy Commissioner Corina Cretu told Kathimerini in an interview during her seventh visit to the country last week.

In her interview, the Romanian European Commission official stressed that Greece needs to speed up efforts in key areas including waste management and incentives for entrepreneurship. She also heralded the increase of Community funds for the next budget period.
 

We are already in the fourth year of the National Strategic Reference Framework’s (NSRF 2014-20) implementation and although Greece is ranked among the countries with the highest absorption of funds to date, it has been strongly criticized as to whether these rates represent the true picture of the money actually channeled into the real economy. What is the real picture?

Let’s look at the broader picture: Less than two months ago Greece successfully concluded its three-year stability and support program. In doing so, it turned the page on eight difficult years and started writing a new chapter, thanks to the efforts of the Greek people, the country’s commitment to reform, and the solidarity of its European partners.

I remember going to Greece in 2015, at the height of the crisis and I remember the dedication of the Greek authorities – national, regional and local alike – in making the best use of European Union funds for the direct benefit of the Greek people. Now, this is my seventh mission to Greece – I don’t think I have visited another EU country that often, except my home country of Romania – and I still feel that dedication on the ground and visit beautiful, successful EU-funded projects.

This week I visited impressive infrastructure projects and inaugurated Lake Karla in Thessaly [following its restoration]. And while I’m happy to see these massive infrastructure projects finally completed after some years of works, sometimes decades, as well as with significant EU funding, now is also the time to further intensify efforts for solid pipelines of new, mature projects that will support a lasting recovery in the country. In this regard, helping small and medium-sized businesses get better access to EU funds is of crucial importance.

Overall, EU investments are a success in Greece. This is the result of the 2015 New Start for Jobs and Growth that the Commission launched to complement the stability and support program, with exceptional measures to facilitate maximizing the use of EU funds in the country. But this is first and foremost a Greek success, as they were able, in difficult times, to achieve the necessary reforms and to fully seize the investment opportunities offered by EU funds, in order to get back on the path of sustainable growth.

After completing a series of major projects (e.g. highways) and other phasing projects, there is concern about the Greek administration’s readiness to prepare adequate projects and actions for the absorption of Community funds. What should be done?

Greece managed to implement important projects in the 2007-13 budget period in the fields of transport, digital networks, entrepreneurship, environment, and social and health care. The completion of these projects has created a virtuous circle of job creation, economic activities and growth, not to mention the substantial improvements they have brought to the lives of the Greek people.

This week, for example, I had the opportunity to travel on the high-speed Tithorea-Lianokladi-Domokos railway line, which will connect Athens to Thessaloniki in a record 3.5 hours next year, and this quantum leap in Greek transport has been made possible with 1 billion euros in EU funds.

I could mention many other emblematic projects which I had the pleasure to see for myself during my visits to Greece – the Tempi tunnels I inaugurated with Prime Minister Alexis Tsipras, the five motorway concessions, the solid waste treatment plant in Western Macedonia and the Attica schools renovation project, for example.

But, as I mentioned above, what is of key importance now is pipelines of new, mature projects which will ensure their timely implementation.

Greece currently ranks among the top absorbers of EU funds. So my one key message is: Keep up the momentum. And this requires two things: political ownership and coordination. All stakeholders involved in the roll-out of Cohesion Policy programs at all levels – national, regional and local – need to work closely together to this end. Time is pressing and the Greek real economy needs more investments.

Which sectors or projects are lagging behind and how are projects in critical areas such as waste management progressing?

In solid waste management, in spite of some good progress and successful projects, more efforts are needed to solve the issues for which Greece unfortunately is still paying high amounts in fines. On many occasions I reiterated that my services were ready to help and I recalled that 1 billion euros of EU funds are still available for investments in this sector.

One billion euros from EU funds is also available for projects in the field of digital technologies and e-government. Although good examples of projects exist also in this sector, like the Rural Broadband project which won the 2017 European Broadband Awards, here also more efforts would be beneficial for the timely implementation of the national digital strategy and a selection of projects under the Next Generation Access plan.

Greece recently suffered a major wildfire in Mati, eastern Attica, and is waiting to receive financial assistance from the EU Solidarity Fund. At what stage is the relevant request that has been submitted?

From day one of the disaster, I was in contact with the Greek authorities and my services were in contact with their counterparts and ready to provide all necessary support. So we are in contact. But I want to reiterate how deeply shocked and saddened we are by this tragedy. I also informed the Greek authorities about our openness if they would consider redirecting some of their EU funds toward regenerating economic activity in the affected areas, so we can best support local communities.

How are the discussions on the new Multiannual Financial Framework coming along and what can Greece expect?

I’m proud of what we have achieved with our proposal for the 2021-27 Cohesion Policy; a radically modernized, more flexible and simplified policy which will make EU funding easier to manage for regional and local authorities on the ground and easier to access for small businesses and startups.

Our proposal is now in the hands of the European Parliament and the member-states, and I believe that negotiations should start by the end of this year if we want to have an agreement in 2019, so the funding can actually start reaching beneficiaries on the ground from day one of the new period. This would prevent the significant delays we experienced in the last budget period and would ensure certainty and continuity of funding for the benefit of all.

As you know, in an unprecedented move of transparency, the European Commission has included national envelopes in its proposal for the future Cohesion Policy. For Greece, we propose an increased envelope in the context of an overall reduction of the Cohesion budget; around 1.5 billion euros more than in 2014-20, which is approximately the aggregated amount of all the major EU projects I visited this week – Lake Karla, the Tithorea-Lianokladi-Domokos railway line and the Thriassio Pedio Freight Complex in Attica.

Against this background – increased EU investment opportunities for Greece and the necessity to reach a rapid deal for the sake of the beneficiaries of the funds – we are counting on Greece to actively participate in the discussion on the future Cohesion Policy.

For several months there has been a difference of opinion between the European Commission and the Independent Power Transmission Operator of Greece (ADMIE) concerning the electrical interconnection of Crete with Attica. The European Commission has asked Greece’s Regulatory Authority for Energy (RAE) to withdraw the decision to award the project to ADMIE. What is the problem for the Commission with regard to the technical specifications of the project? Given that the island faces a real danger in terms of energy supply after 2020, what needs to be done to get the project moving? If the Attica-Crete interconnection proceeds as a national project, will it be “delisted” as a project of common interest (PCI)?

The Commission fully supports the timely implementation of the Crete-Attica interconnection as part of the EU-agreed PCIs. The Crete-Attica interconnection is in the best interest of all parties and its fast implementation, benefiting from studies already completed (and supported through the Connecting Europe Facility), will be essential to reduce costs for Greek consumers.

In order to continue benefiting from PCI status the project needs to operate within and fully comply with the applicable legislative framework, which is the Trans-European Networks for Energy Regulation.

You have stated in a previous interview that you dream of inaugurating the Thessaloniki Metro, having recently attended the ceremony for the delivery of another emblematic project for Greece, the tunnel that bypasses the Tempi Valley. What more should Greece do to maximize the benefits from the European Regional Development Fund?

As regards the Thessaloniki Metro, thanks to the efforts and the coordination between the competent authorities, most issues have been resolved and viable technical solutions have been found in particular for the archaeological findings at Venizelou station.

I am now confident that in 2020 this state-of-the-art metro will see the light of day for the direct benefit of the people of Thessaloniki, who will not only enjoy a modern, rapid and comfortable transport system, but also cleaner air in the city.

Greece has everything in its hands to make EU investments a success on the ground. Efforts would need to focus on the completion of the infrastructures needed, in particular in the environmental sector, and on making sure that EU funding reaches Greek small and medium-sized businesses in a timely manner. The country will further improve its growth prospects by also continuing to implement a wide range of reforms already launched over recent years. This would further enhance the investment environment, create new investment opportunities and strengthen the capacity of the departments in charge of managing the fund in a more efficient and timely fashion. At every step of the way, the Commission is ready to help and support Greece’s efforts toward a growth-friendly economic model.

Given that the increase of investments, both public and private, in infrastructure projects is a priority at EU level, what are the new initiatives/actions of the Directorate-General for Regional and Urban Policy to that end?

Mobilizing public and private investments, also in the field of network and environment infrastructure, is indeed a major priority for the Commission. Coupled with the right reforms, infrastructures are key enablers of growth, jobs and above all cohesion. But Cohesion Policy funds alone won’t fill the huge investment gap that we are facing now. This is why we proposed to increase further possibilities for synergy with European Commission President Jean-Claude Juncker’s Investment Plan, which is becoming InvestEU, to invest in innovation, strategic networks and energy transition.

The Commission will reinforce its tailored support to member-states and regions in designing and delivering quality and financially viable projects, with the setting up of the InvestEU Advisory Hub, pooling together 13 different advisory services into one key entry point. It will supplement the current efforts of platforms like the Joint Assistance to Support Projects in European Regions (JASPERS) and, of course, the constant support of our Commission experts, also on the ground.

In Greece there is a huge potential for the use of all these new possibilities in 2021-27. For example for sustainable urban transport systems, and not only in Athens and Thessaloniki, but also in medium-sized cities. We could also consider further developing suburban railway systems, notably in the wider Thessaloniki area. On digital connectivity, new investments could complete of the “regional broadband extension” project, ensuring the coverage of the Greek territory with fixed fast broadband infrastructure.

Finally, when it comes to energy, while we will no longer invest in large-scale infrastructures and certainly not in any infrastructure related to fossil fuel-based energy, we will consider investments to enhance the use of renewable energy sources, also at the local level, such as smart grids and innovative storage facilities, of which a nice example is currently being implemented on Tilos island.

Greece faces a significant investment gap, but there is also a significant lag in the absorption of funds for the Competitiveness program. What should be done to improve the effectiveness of the program?

Greece faces an important investment gap and Cohesion Policy funds alone cannot cover that gap. That is why we insist on concentrating resources where they have the highest added value and most lasting results, like in the competitiveness of small and medium-sized businesses. This concentration is going to be further enhanced in the next long-term EU budget.

At the same time, with the use of financial instruments, we promote the direct implication of private businesses in Cohesion Policy projects and we strive for the highest possible multiplier effect. This is the same principle as President Juncker’s Investment Plan for Europe. You know that Greece is one of the top beneficiaries of the Juncker Plan’s European Fund for Strategic Investments relative to GDP. The EFSI is now set to trigger almost 11 billion euros in investments and support more than 20,000 small and medium-sized businesses in the country.

As regards the Competitiveness program, you can choose to see the glass half full or half empty. I prefer to see it as half full, and let me explain why. When it comes to promoting innovation and supporting businesses, it is true that funds should be reaching the market faster.

On the other hand, a recent call for innovative projects with a budget of 180 million euros received proposals worth 1.2 billion euros; given the success, the budget of the call was increased to support innovative projects worth 420 million euros. This is a huge success. In addition, we now have a complete set of fully operational financial instruments under the Competitiveness program, for support to energy efficiency, entrepreneurship, as well as the Equifund providing venture capital for innovation and startups.

The Equifund is already fully subscribed, which is another huge success. The instrument is now supporting projects also in the more peripheral areas of Greece and not only in Athens. This is great news for Greek businesses and for the Greek economy.

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