EU Cohesion Policy

The cohesion policy is an important channel to show solidarity and support weaker communes and regions in Europe. In the current debate about the future rules for cohesion funding, it is often suggested that governments that don’t abide to European values and decisions should be sanctioned by suspending these funds. However, the S&D should clearly position itself against such sanctions: weaker communes and regions are not responsible for the behaviour of the government of their countries. Furthermore, suspending cohesion funds might fuel anti-European ressentiment. We must not make the mistake and deepen the division that is currently growing between countries ruled by anti-European governments and the EU.

2. Put human capital first

Cohesion policy has a unique role in reducing inequalities. As one of the European Union’s main investment policies, it has a tremendous potential to create new market pulls, send the right signals to investors and promote inclusive growth. On the other hand, climate change is one of the major challenges of the 21st Century and the EU needs to demonstrate it can lead by doing in the global climate agenda, especially when former strategic partners like the US have relinquished their leadership role. Therefore, the EU needs to make sure its cohesion policy is directed to preparing regions and cities in Europe for a just transition to a low-carbon economy. Cohesion policy needs to provide a way out for those workers currently employed in high-carbon activities such as coal mining or energy-intensive industries. Cohesion policy has the potential and the instruments to finance early retirement for senior workers and retraining for the junior ones. It also has a robust financial backing to invest in low-carbon infrastructure such as charging stations for EVs and electrified highways. Also, this infrastructure needs to be resilient to the effects of climate change, ensuring jobs and prosperity for workers even in adverse conditions. For example, workers at ports deserve a safe working environment in the event of sea level rise and farmers deserve fair and affordable insurances against losing their livelihood to extreme climate-related events. Cohesion policy is therefore an essential instrument to build a new Europe, one that protects its workers and prepares them for a low-carbon future. European Socialists have worker rights and reducing inequality at their core and therefore European Socialists are best positioned to turn the EU’s Cohesion Policy into the best instrument to ensure a Just Transition for European workers, regions and cities.

Cohesion policy will be based on solidarity or it won’t have a solid and bright future. It must support citizens in their personal development. It must be about sustainability, quality infrastructure and economic development which reduces the gaps between regions, between generations and between gender. Cohesion policy must be visible for the citizens. This is absolutely crucial for the image of Europe. It must invest in areas where national investments lack and it must also be ready to deal with new challenges such as migration. We must aim for a greater coherence through thematic concentration, a proper control mechanism, a single audit chain, the implementation of a standard cost and a coordination with EU macroeconomic policies in order to achieve simplification and so increase the efficiency of the cohesion policy. This will e.g. enable cities to better tackle urban problems such as poverty or pollution and will positively influence cross-border & territorial cooperation which will also aid in reducing inequalities. A strong “social pillar” & focus on human development through better education are indispensable for an EU that is & also feels “together”.

Lisbon has been the stage of unprecedented outcome of an election. A huge consensus from the left wing leaded by the PS – Socialist Party in Portugal – led to a parliamentary agreement that changed the shift of right wing policy and austerity measures that were wrecking the public response and the public services. The economy fought back with this lef wing coalition and its growing near the 3 points and the government solution that everyone considered dead since the beginning is now stronger than ever and giving socialist and democratic solutions to the country, recovering the wounded public sector and giving jobs and fair incomes to workers and families. This week the Prime-Minister António Costa gave an interview to a national newspaper, and proposed a national consensus between parties from left and right (democratically elected and behaved) especially the biggest party from the centre right to join Costa’s Government in a National consensus project to decide the strategic plan for structural investments from 2021 to 2017. Although there is still an huge gap between the two parties this is an example of behaviour that will put S&D and European Democratic Parties in the front row of political decisions. Bring democratic players TOGETHER in order to avoid that structural investments, that will became the main pillars of the countries economic response, stay in the hand of changing powers or wills in each election or period of political challenge. TOGETHER proposing European funds being discussed and decided by large majorities make us more Socialists and assure that we separate public (national and European) interests from erratic political power, or passing by private sector interests.

3. EU support for all regions

4. More funding for cohesion policy

I believe that greater cohesion and inclussiveness is within EU’s hand’s reach. Europe already has the best social foundations that account for great protection and can be improved for more inclusive growth. Focus should be put on boosting innovation, leading the 4th industrial revolution, and championing free trade in order to create impeccable opportunities for europeans both in Europe and abroad. Furthemore, I strongly believe in increasing the financial literacy of europeans. With greater and safer participation in the financial markets, the political stability and cohesion in Europe will increase.

The cohesion policy should remain at the centre of the European agenda. We progressives must defend the policy both on grounds of solidarity and rationale: only a more equal European Union can enhance labour standards in the single market and avoid a race to the bottom in terms of social rights. All funds must be used in a transparent and just way, so that they serve their purpose of increasing sustainable development, social inclusion, and employment, especially of the youth.

Only way for European socialists to catch up with time and stay ahead of things, would be to combine so called libertarian economy with “small government” and establish social security paid through either negative tax or basic income.   Libertarian economy is something we all know, even if many don’t know it by name. It is the idea of market and economic relations,which are completely liberated from governments planning and regulation, with government stepping in only to prevent threats to national security(if state is conservative) or environmental disaster (if state is progressive).   For a past 25 years this idea dominated economic thinking, was claimed by conservative part of political spectre, was never truly implemented to the max, but was nevertheless dominant across the planet, from New Zealand to Sweden.   Many traditional socialists condemned the idea on numerous occasions, but were unable to stop the pover of profit disregard; even 2008 crisis didn’t help .   Free market economy generates incredible wealth and prosperity; in fact its capacity of satisfying the demand, and hence-populations needs is unprecedented in human history. It is especially important to mention that the prosperity happened disregard political regime in the countries who tried free market, and especially considering the repetitious collapse of any attempt to build state supported nationalized economy to satisfy peoples needs; would it be hard core communist planning, or state run agencies in a free countries.   As socialists we must admit, however that march of free market libertarian economy also caused incredible, and unfair inequality, return of brutal zero-chance poverty and eventual suffering. Even a brief unbiased look allows to see that core of the problem is not luck of regulation or state planning, problem is purely with distribution of wealth… So called trickle down economy, idea that rich people would invest and spend money, if released from tax burden, works well with millionaires who need to re-invest to keep themselves rich. Or, in worse case scenario,who simply buy houses, limousines, jewelry for lovers, designer closes-eventually outraging public opinion, but giving jobs for thousands if not millions of designers, car manufacturers, craftsman or textile workers.   It does not work with billionaire though, with notorious “1%”. At this level money looses its pover as a tool of purchase and reward: for people who have that much capital the wealth is often a matter of sport-like a fun competition, etching ones personal pride to be at the top of Forbes list. So, eventually, big portion of wealth is simply sitting somewhere at saving accounts, un-invested and not spent.   Its our job, as social democrats, to ensure the fair and acceptable way of wealth redistribution: so while billionaire upper class would compete for a place in “Top 10 of rich peoples” rating, starving family in Greece or homeless teen in Paris would not feel like they are abandoned by society. It can go either through tax, or through government bonds or other borrowing, and ensure that it would go through proper social contract, without leaving both capital owners and welfare recipients frustrated.   It is worth mentioning, that in the situation when traditional job market and employer-worker relations are dying under pressure of outsourcing and automatisation, resurrection of small businesses, individual enterprise, gig economy, service based jobs is inevitable. So our focus should be not with collecting social security benefits from the meting iceberg of labor market, but establishing fair and efficient system of personal income tax.   Getting back to libertarian roots of my idea – I would propose to move away from the progressive tax rate, when percentage of tax was depended on income, and to tax whole population, everyone who earns income above welfare limit (and all active entities) . To set one, single, same rate, would it be 10, 20 or 25 percent. Rate will depend on who is in pover of course This way we can move away from truly Babylonian system of tax reboots, tax heavens, tax shopping and debates about which social groups contributes more to economy. From something which even most accountants fail to understand.   Should the same, universal tax rate apply not only to all individuals in the state, but also to all EU member states? Isn’t going to happen tomorrow, but in a Dream Europe-may be.   It is worth mentioning that in the left circles, there is a belief that once collected, tax will and shell be spent for a good cause in any developed society.   The reality, however, is far less optimistic..   Currently half of budget in most developed countries is spent on wars, and another half on corporate subsidies or huge Social Security bureaucracy, who is supposed to supervise distribution of social aid, and punish those who breach the rules (say – someone painted neighbors house for a fee without declaring). And only scraps go to those in need, which does not help to solve poverty.   That’s why the idea of “small government” is vital; system which would be covering the needs of people without often grotesque planning and research-either through basic income, or preferably, through negative tax, providing tax refund to anyone who declares income below certain welfare line. The Dutch system of “housing subsidies”, and “health insurance subsides” , paid directly by tax office, which is existing for decade already, and works as a clock, can be used as wider model of such tax refund welfare.   But no real equality in Europe would be possible unless there would be income and social security equality among members of different member states. it is high time to establish pan European minimal income and social security threshold so the welfare and prosperity of EU citizens would not be depended on what passport individual holds. Situation when Romanian national has to work extra hours to earn 600 Euro , while welfare recipient in Northern Europe receives twice as much as social aid is an economic and social cancer which might rot out whole thing if not dealt with in due time…   Chinese say that thousand miles way starts with a small step, so even one step this direction will be a good start.   Nicholas Gabrichidze

5. Evaluate the quality of progress, not just the figures