Ref. Ares(2012)1320527 - 09/11/2012 Position of the Commission Services on the development of Partnership Agreement and programmes in IRELAND for the period 2014-2020 INTRODUCTION............................................................................................................... 3 1. MAIN CHALLENGES ............................................................................................... 4 2. PRIORITIES FOR FUNDING.................................................................................... 9 2.1. Combatting long-term and youth unemployment and social exclusion .......... 10 2.1.2 Combatting youth unemployment .......................................................... 11 2.2. Promotion R&D investment and the competitiveness of the business sector................................................................................................................ 11 2.3. Promotion of environmentally-friendly and resource efficient economy .......................................................................................................... 12 3. SUCCESS FACTORS FOR EFFECTIVE DELIVERY........................................... 13 4. PRIORITIES FOR EUROPEAN TERRITORIAL COOPERATION ...................... 13 ANNEX ............................................................................................................................. 15 FUNDING PRIORITY: COMBATTING LONG-TERM AND YOUTH UNEMPLOYMENT AND SOCIAL EXCLUSION................................................. 17 FUNDING PRIORITY PROMOTION OF R&D INVESTMENT AND THE COMPETITIVENESS OF THE BUSINESS SECTOR ........................................... 20 FUNDING PRIORITY PROMOTION OF ENVIRONMENTALLY-FRIENDLY AND RESOURCE EFFICIENT ECONOMY .......................................................... 23 ADMINISTRATIVE ARRANGEMENTS ....................................................................... 27 2 INTRODUCTION The European Union faces the daunting challenge of emerging from the crisis and putting economies back on a sustainable growth path. The exit strategy entails restoring sound public finances, growth-enhancing structural reforms and targeted investments for growth and jobs. For the latter, the CSF funds1can make an important contribution to sustainable growth, employment and competitiveness. To ensure that the CSF funds deliver long-lasting economic and social impacts, the Commission has proposed a new approach to the use of the funds in its proposal for the 2014-2020 Multiannual Financial Framework2. Strong alignment with policy priorities of the Europe 2020 agenda, macroeconomic and ex-ante conditionality, thematic concentration and performance incentives are expected to result in more effective spending. It is an approach that underlines the need for strong prioritisation and results. The CSF funds will thus provide an important source of public investment and serve as a catalyst for growth and jobs by leveraging physical and human capital investment while they serve as an effective means to support the implementation of the Country Specific Recommendation issued in the context of the European Semester. This approach is in line with the European Council's call of 29 June 2012 regarding the use of the Union's budget3. CSF Funds should aim at jointly fostering competitiveness and convergence, by setting the right country-specific investment priorities. A general refocus of spending towards research and innovation, support to SMEs, quality education and training, inclusive labour markets fostering quality employment and social cohesion, delivering the highest productivity gains, mainstreaming of climate change objectives and shifting to a resource-efficient low carbon economy is necessary. In order to do so, planning and implementation of CSF funds have to develop a strong integrated approach for mobilizing synergies and achieving optimal impact both within countries and across borders, notably in the framework of strategies such as the Atlantic strategy for maritime policy. The Europe 2020 objectives must be mainstreamed across the different CSF Funds, each of them bringing their contribution to smart, sustainable and inclusive growth. Moreover, CSF Funds have a key role to play in supporting financial instruments that can leverage private investment and thus multiply the effects of public finance. In short, we need a carefully targeted and results oriented use of CSF funds that maximises their combined impact. The purpose of this position paper is to set out the framework for dialogue between the Commission services and Ireland on the preparation of the Partnership Agreement and Programmes which will start in autumn 2012. The paper sets out the key country specific challenges and presents the Commission Services' preliminary views on the main funding priorities in Ireland for growth enhancing public expenditure. It calls for 1 The EU funds covered by the Common Strategic Framework (CSF), i.e. the European Regional Development Fund (ERDF), the European Social Fund (ESF), the Cohesion Fund (CF), the European Agricultural Fund for Rural Development (EAFRD) and the European Maritime and Fisheries Fund (EMFF) 2 COM (2011) 500 final, COM (2011) 398 final and COM (2012) 388 final. 3 Conclusions of the European Council of 29th June 2012 (EUCO http://www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/ec/131388.pdf 3 76/12)- optimizing the use of CSF Funds by establishing a strong link to productivity and competitiveness enhancing reforms, leveraging private resources and boosting potential high growth sectors, while emphasizing the need to preserve solidarity within the Union and ensuring the sustainable use of natural resources for future generations. There is also a need to concentrate future EU spending on priority areas to maximise the results to be obtained, rather than spreading funding too thinly. EU funding should also be used to fund EU level priorities and to ensure that Ireland can draw full benefits from its EU membership. Therefore the Commission proposes to group and target EU funding to the key challenges outlined in this position paper. National public spending can not only be used to co-finance but also to finance investments which are complementary and linked to EU funded projects in particular at regional and local level. The starting point of the Commission’s considerations are the Memorandum of Understanding signed between the Irish authorities, the European Commission, ECB and IMF in 2010, the Commission Staff Working Document "Assessment of the 2012 National Reform Programme and stability programme for Ireland"4 accompanying the document "Recommendation for a Council Recommendation on Ireland's 2012 national reform programme and delivering a Council opinion on Ireland's updated stability programme" 5and the subsequent Council Recommendation of 10 July 2012 on the National Reform Programmes 2012 of Ireland and delivering a Council opinion on the Stability Programme of Ireland 2012-2015.6 The Commission has assessed Ireland’s progress towards its Europe 2020 targets as reflected in the 2012 update of Ireland's National Reform Programme and the commitments undertaken by Ireland in the Stability Programme and in the Euro Plus Pact, underpinned by the country-specific recommendation of 10 July 2012, and countryspecific development challenges. The position paper takes account of the lessons learnt during the 2007-2013 programming period and the Commission's legislative proposals for 2014-2020. In line with commitments given by Ireland in the Euro Plus Pact, this position paper encourages Ireland to focus on fostering competitiveness and employment. Additionally the position paper encourages Ireland to address inefficient use and exploitation of natural resources and exploiting the job-creation and commercial opportunities provided by the harnessing of Ireland's substantial renewable energy resource including marine renewables. Finally it invites Ireland and its regions to exploit to the maximum potential synergies between the CSF Funds and with other sources of EU funding in a strategic and integrated approach including a cooperative and transnational perspective. 1. MAIN CHALLENGES The Irish economy has suffered considerable dislocation in recent years in the aftermath of the implosion of the real estate boom in 2007. Economic activity contracted for three full years between 2008 and 2010, with sharp falls in investment and private consumption, offset to some extent by net export growth. Although full year growth of 4 SWD (2012) 316 final of 30.5.2012 5 COM(2012) 316 final 6 2012/C219/13 of 10.7.2012 4 1.4% was recorded in 2011, as of the second quarter of 2012 GDP is still down 9% in real terms from peak values. Employment has shrunk by almost 17% from its 2007 peak, with large contractions in construction and manufacturing sectors. Unemployment has risen ten percentage points since 2007 to 14.8%, and is increasingly long term in nature with people unemployed for longer than one year now representing 60% of all unemployed. Public finances have also deteriorated markedly, with a government deficit (net of banking recapitalisation costs) of 9% of GDP recorded in 2011, one of the largest in the EU. To assist Ireland dealing with the challenges stemming from the crisis, in December 2010 a 3-year financial assistance programme was put in place, providing financing for EUR 85 billion (EUR 45 billion from the European Union and EU member states, EUR 22.5 billion from the IMF, and EUR 17.5 billion from Ireland’s own resources). The programme aims at bringing the general government deficit to below 3% of GDP by 2015, in line with the Council Recommendations to Ireland in the context of the excessive deficit procedure, restructuring and right-sizing the domestic banking sector, introducing efficiency-enhancing reforms throughout the economy (including labour and product markets and natural resource management, mainly in terms of water and energy) and laying the conditions for a return to substantive and sustainable growth, which is essential to facilitate the required reduction in the public and private debt burdens. The programme is subject to quarterly reviews, and so far Ireland has implemented it steadfastly despite challenging domestic and external economic conditions, allowing for the timely disbursement of programme funds. Turning to the outlook, real GDP is expected to grow by 0.4% in 2012, due entirely to expansion of net exports. Domestic demand is set to contract again due to the effects of fiscal consolidation, household deleveraging and low business investment. Unemployment is set to increase slightly in 2012, as employment contracts for the fifth successive year. Over the medium term, real GDP is expected to return to growth of close to 3% per annum. Net exports are expected to continue to contribute most to growth on the back of competitiveness improvements achieved since 2008 and the continued attractiveness of Ireland as a location for FDI. Private savings are expected to fall somewhat to allow for growth in private consumption while business investment is expected to pick up from current very low levels. The unemployment rate is set to fall only gradually (to 13% by 2015), as employment growth remains subdued over the period. Continued sizeable fiscal consolidation in 2013-2015 is set to see the deficit fall to just below 3% of GDP in 2015. Achievement of a budgetary position close-to-balance or in surplus will require further tight budgetary control until the end of the decade. There are notable regional differences in economic performance and unemployment levels. For the 2007-2009 period GDP per capita (purchasing power standard) in the Southern and Eastern (S&E) region (at 151.1% of EU average) exceeded that recorded in the Border, Midland and Western (BMW) region (96.6%) by more than half. The historical difference in unemployment between the regions has re-emerged since the crisis, down to the greater reliance of the BMW region on construction activity, which has since contracted sharply. Unemployment in the BMW region currently stands at 16.5% in the second quarter of 2012, higher than in the S&E region at 14.1%. The structural difference in labour force participation between the regions persisted through the boom period and still remains, with BMW region participation at 57.9% and the S&E region at 60.9%. Finally, inward investment continues to be attracted to the (more populous) areas of Greater Dublin and Cork than the predominantly rural BMW region. 5 Due to the industry’s concentration in the more remote areas of the coastline, the Irish seafood industry plays a critical part in the sustainable development of the economic and social fabric of the many small communities it serves and in ensuring sustainable fish supply to its customer base. The industry supports the economic viability of rural communities by maintaining working populations and communities in the more remote coastal regions typically characterised by low population densities, high dependency rates, below average levels of educational attainment and higher than average levels of deprivation. The following table shows the current situation of Ireland vis-à-vis the Europe 2020 strategy targets and reflects, where available, the relevant targets included in the Ireland National Reform Programme. Europe 2020 headline targets Current situation 3% of expenditure on research and development The reduction of greenhouse gas emissions in sectors not covered by the Emission Trading System by 20% compared to 2005 levels. 20% of energy from renewables 20% increase in energy efficiency 75% of the population aged 20-64 should be employed 1,8% -7,6% (2010) National 2020 target in the NRP 2% 5,8% (2010) N/A 64,1% -20% (national binding target for non-ETS sectors compared to 2005) 16% 20% 69-7% 10,6% 8% 49,4% 60% 277,000 200,000 fewer people experiencing consistent poverty by 2020 The share of early school leavers should be under 10% At least 40% of 30-34 years old should have completed a tertiary education Reducing the number of people at risk of poverty or exclusion by 20 million in the EU Therefore Ireland's most pressing challenges are related to the high levels of overall and youth unemployment, increasingly long-term in nature, and the increasing risk of social exclusion, insufficient commercialisation of basic research and low availability of finance for the private sector, particularly for SMEs and the inefficient use of resources. These are inter-related and are examined in turn. High levels of unemployment, increasingly long-term in nature, high youth unemployment and increasing risk of social exclusion The biggest challenges that Ireland is facing relate to increasing levels of long-term unemployment and high youth unemployment. The overall employment rate dropped by almost 10 percentage points between 2007 and 2010, with low skilled men and young people worst affected. The national target of an employment rate between 69-71 % for 2020 is thus very challenging. The long-term unemployment rate in Ireland increased from 1.3% in 2007 to 8.6% in 2011 and the share of the long-term unemployed among all unemployed was just under 60% in 2011, double the rate of 2007. 18% of unemployment recipients have been in receipt of unemployment assistance for three continuous years or more, with 6% (18,000 people) in receipt of it for 6 years or more. 6 Youth unemployment reached 29.4% in 2011, well above the EU average of 21.4%. The NEET7 rate in Ireland rose by 8.2 percentage points to 18.9% between 2007 and 2010. The main driver behind this has been a rise in male NEET rates, which have increased by over 10 percentage points to 20.2%. Ireland also faces challenges relating to a relatively high level of early school leaving at 10.6%. Job losses in Ireland since the onset of the crisis have been concentrated typically among low skilled groups such as 'craft and related', 'plant and machine operatives', 'clerical' and 'sales'. In particular, jobs in construction will not come back, and skills acquired by many are no longer in demand. Although the gender gaps are narrowing, the employment rate of women is still low (59.7%) for women between 20 and 64 years old and the impact of parenthood on women's employment is significant. There is also further need for accompanying structural changes in agriculture and fisheries and to foster economic diversification of rural and fisheries-dependent areas. Ireland was above the EU average in relation to the at-risk-of-poverty-or-exclusion rate in 2010 (29.9% compared to 23.5%). This was driven mainly by the low work intensity as reflected in the sub-indicator, which increased by more than 9 percentage points between 2007 and 2010 to reach 22.9%, more than twice the EU average of 10%. Children face worse outcomes when compared to other age groups, again driven by low work intensity (i.e. the share of children living in low work intensity households), which reached 25.5% in 2010, compared to an EU average of 9.1%. Insufficient commercialisation of basic research and low availability of finance for the private sector, particularly for SMEs In terms of R&D investment, Ireland lags behind the EU2020 target. The target for 2020 is to reach 2% of GDP of RTD spending from the current 1.8% which predominantly comprises private sector investment. The current Irish policy emphasis on "Building Ireland's Knowledge Economy" reflects an increasingly integrated approach to research and innovation, and the acceptance at national and international levels that research, technological development and innovation (RTDI) are of critical importance to competitiveness, employment and the enhancement of society. Nevertheless recent surveys suggest that the crisis has dampened the propensity to invest amongst Ireland companies with the majority of Irish companies purportedly spend less than 2% of their revenues on R&D while 35% of companies spend absolutely nothing on innovation despite the contribution R&D can make to maintaining or extending market share. Ireland is ranked 10th in the Innovation Union Scoreboard and is part of the group of 'Innovation followers' in the EU. Since the inception of the Programme for Research in Third Level Institutions in 1998, successive Irish governments have invested heavily in research infrastructure and capacity building within third level educational institutions. The challenge must be to obtain the full benefits of this investment through: 7 Not in employment, education or training. 7 • commercial exploitation of research effort, leading to the sharpening of the competitive and innovative edge of Irish enterprise generating employment and self-employment in high growth potential companies; • strengthening private research, development and innovation activities as well as creating an innovation-friendly business environment by matching R&I business demand to national and regional supply; • switching focus from basic research towards technological and applied research, early product validation and effective technology transfer from research centres to businesses; • development of clusters as well as encouraging cooperation between cluster organisations and knowledge institutions. The banking crisis and pressures on public finance have reduced access to finance credit and other forms of support for start-up and expansion of Irish businesses, hampering entrepreneurship and the processes of product/service innovation. Given the importance of SMEs for job creation in Ireland, this sector is key for a job rich recovery. Inefficient use of resources Major challenges exist in terms of the sustainable use of resources, particularly in the areas of renewable energy, energy efficiency, water8, biodiversity, air, soil and marine resources especially when taking into account the threat of climate change. In terms of renewable energy the main challenges to be addressed are to reduce dependence on fossil fuel thereby improving security of supply and reducing greenhouse gas emissions while limiting the impact on the environment. In order to achieve the stepchange needed, Ireland needs to focus on achieving further progress in terms of share of renewable energy (in particular marine, wind and biomass energy) in overall energy consumption. The share of renewable energy sources (RES) in gross final energy consumption was about 5,8% in 2010, among the lower shares in the EU and well behind the national target to increase this share to 16% by 2020 (the average EU target is 20%) as well as the expectations of the Irish National Renewable Energy Action Plans of 6.6% in 2010. In terms of energy efficiency, Ireland needs to achieve energy savings for business and improve the energy efficiency of buildings. Ireland needs also to achieve more efficient use of energy in transport and in the use of electrical and thermal energy in industrial processes. The Government is committed to lowering the greenhouse emissions in non-ETS sectors (mostly transport, agriculture and housing) by 20% by 2020 compared to the level observed in 2005. In 2010 greenhouse gas emissions were 7,6% lower than in 2005 and projections for 2020 based on existing measures show a gap of almost 17% to the national binding target of 20%. GHG emissions from agriculture are 29.1% of the total– the highest share among EU Member States. Ireland’s water quality compares well with that of most other EU countries but diffuse pollution by nitrates, phosphorus and pesticides is significant in all the river basins. Also point source pollution is a problem in many river basins. For coastal water, efforts will be 8 Including the use of household water 8 needed to reduce nutrient loads to water courses which flow into marine waters at risk of eutrophication. Natura 2000 sites in Ireland correspond to 13% of the country's area. All of the grassland, forest and heath and scrub habitats in Ireland have an unfavourable conservation status. Agriculture and forestry are considered to represent the most significant pressure on the conservation status of these habitat types. Considerable effort will be needed to meet the targets defined in the EU Biodiversity Strategy9. Soil erosion occurs as a result of poor soil management practices on vulnerable soils. Soils are relatively rich in organic matter, but are threatened by peat extraction and landuse changes due to urbanisation or ploughing of rough or permanent grassland for tillage crops. Some 20% of the territory can be subject to landslides. Emissions of ammonia (mainly from livestock housing, manure stores, manure spreading, grazing animals and nitrogen fertilizers) to air cause acidification of soils and eutrophication of aquatic and terrestrial ecosystems. The UN Gothenburg Protocol10 requires Ireland to reduce emissions by 1% by 2020. The Irish fisheries sector still faces major challenges to achieve economic profitability, as well as social and environmental sustainability, despite years of focusing on fleet renewal and permanent cessation of fishing activities. Most stocks fished are still over exploited and subject to wasteful practices (discards) and therefore they do not yield their full economic potential. There are imbalances between certain fleets and resources that need to be addressed as well as issues of control and data collection. The aquaculture sector has not managed to contribute its share to meeting the continuing growing seafood demand. Climate change impact scenarios suggest significant climate change can be anticipated in Ireland over the next half century. Mean temperatures in Ireland relative to the 1961– 1990 averages are likely to rise by 1.4–1.8°C by the 2050s. Winter rainfall in Ireland is projected to increase by approximately 10% while reductions in the summer rainfall of 12–17% are predicted. Changes in the frequency of extreme events will accompany these climate changes. The predicted increase in winter rainfall increases the risk of future flooding, in particular in the West. 2. PRIORITIES FOR FUNDING The CSF Funds will be useful instruments in tackling a number of development challenges in Ireland and in implementing the Europe 2020 strategy. Each fund should give priority, when relevant, to policy areas addressed in the Country-Specific Recommendation and in the national reform programme. For rural and coastal development, priorities for funding will also contribute to the Common Agricultural Policy and Common Fisheries Policies. Targeted funding should harness growth in Ireland's blue economy, in line with the Integrated Maritime Plan 'Harnessing our Ocean Wealth' adopted by the Irish government in July 2012. To this end the intervention from 9 Communication from the Commission to the European Parliament, the Council, the Economic and Social Committee and the Committee of the Regions: Our life insurance, our natural capital: an EU biodiversity strategy to 2020, COM(2011)244 final. 10 Protocol to the 1979 Convention on Long-Range Transboundary Air Pollution to Abate Acidification, Eutrophication and Ground-level Ozone. 9 the CSF Funds needs to be concentrated on a limited number of priorities. Experience shows that thematic concentration allows for an increase in effectiveness of public interventions by reaching a critical mass with a real impact on the socio-economic situation of a country and its regions. Complementarity is required between countryspecific and cooperation approaches. Prioritisation is of particular importance in times of fiscal consolidation. Three complementary and mutually reinforcing funding priorities are proposed hereunder in line with country-specific challenges11. They reflect the importance of funding needs and potential contribution to growth and jobs. There is no ranking in the presentation of the funding priorities. These are the priorities the Commission would like to co-finance in Ireland for the next programming period 2014-20. Sufficient flexibility is built into the new programming architecture to respond to new challenges and unexpected events, which allow for reprogramming on justified grounds. 2.1. Combatting long-term and youth unemployment and social exclusion Employment and social cohesion should remain the core concerns for Ireland. CSF Funds should contribute to job-rich growth and their impact in terms of employment should be maximized. This calls for stepping up efforts to concentrate investments on employment and up- or re-skilling of the unemployed and labour market measures for young people. Reduction of poverty remains also a very important priority for Ireland and a sizeable part of available resources should be dedicated to promote active inclusion. Thus the relative share of the CSF fund investment should increase in comparison to the programming period 2007-2013. . 2.1.1 Combatting long-term unemployment Support for the unemployed, with a particular focus on the long-term unemployed, to (re) access employment should be the main priority of CSF investment. While measures are being introduced to address job-search requirements and incentivise employment, it will also be necessary to have well designed and effective programmes in place to help the long term unemployed maintain links with the labour market. Activities to support the (re)integration into the labour market need to aim at improving qualification levels of the unemployed, in particular the low skilled, and reduce the skills mismatch of labour demand and supply. Evidence suggests that vacancy levels among certain high skilled sectors requiring tertiary qualifications such as ICT, engineering, science, health and financial services are rising. This points to an urgent need to up-skill the unemployed with skills relevant to those areas in demand, and to retrain those with existing skills to more relevant sectors. This should be done in cooperation with businesses to identify the skill sets needed. Accordingly, the labour market relevance of education and training systems should be increased. Measures in support of women to (re-)enter the labour market will also need to be implemented in order to increase the employment rate. 11 The thematic objectives in the proposed regulations and their link to the funding areas are outlined in the Annex. 10 In the case of areas affected by the restructuring of the agricultural and fisheries sectors, the CSF Funds should support diversification into non-agricultural activities or into coastal or maritime activities in order to create new sources of employment. 2.1.2 Combatting youth unemployment Funds should also be focused on supporting young people not in employment, education and training (NEETS) to participate in education and training programmes, including work experience. Furthermore, while there is a need to ensure that young people remain in education, for those who leave school early, the availability of training programmes with strong links to the workplace or access to traineeships need to be ensured in order to enhance their suitability for employment. 2.1.3 Combatting social exclusion Active inclusion should be the main objective of CSF funding to support social inclusion. In 2010, 7.5% of the Irish population suffered from severe material deprivation, a sharp increase compared with the figure in 2007 (4.5%) and a much higher percentage than the EU-15 average of 5.4%. Young people under 18 are even more strongly affected by severe material deprivation, with 10.6 % suffering from it in Ireland, compared to 6.7 % in EU-15. The primary policy tools to reduce severe material deprivation and consequently poverty are measures that increase employment. These measures should be targeted at those identified as being further from the labour market such as: single parents, the disabled and the economically inactive. Measures to support, at an early stage, children and teenagers of vulnerable groups to help them integrate into society and labour market should also be implemented. Those in poverty or at risk of poverty with very low skills should be helped in gaining at least upper secondary education. 2.2. Promotion R&D investment and the competitiveness of the business sector CSF Funds should continue to support the development of public research capacity and support the necessary measures required to accelerate the commercial exploitation of research knowledge. This may require the introduction of knowledge transfer agreements and other instruments linking research institutions directly to SMEs. The instruments used should include agriculture, agri-food, aquaculture, fisheries and marine sectors. CSF Funds should encourage innovative and sustainable start-up enterprises and expansion of existing small businesses through the provision of financial support and, where appropriate, through mentoring, advice on innovation and other forms of business support. They should stimulate investment in new technologies. Consideration should be given to extending the scope of CSF support beyond micro-enterprise. Ireland should consider the scope for introduction of a more versatile range of financial instruments capable of supporting progressive stages of product/service innovation and enterprise development from start-up through to expansion. CSF Funds should encourage the promotion of cooperation with a view to creating and developing clusters especially Regional Maritime Clusters as drivers of Blue Growth and for the transfer of marine knowledge and technology to industry and supported, where necessary, in a territorial cooperation context. 11 2.3. 2.3.1 Promotion of environmentally-friendly and resource efficient economy Shift to an energy efficient, low-carbon economy The shift to higher resource efficiency and to a low carbon economy has a high potential to enhance the economic growth and employment creation in Ireland. The share of renewable energy sources (in particular marine and wind energy and biomass energy) in the Irish energy mix should be increased. CSF Funds should assist the development and, where possible, the deployment of innovative technologies and equipment leading to the production of renewable energy, including marine, wind and biomass energies. The cooperative opportunities offered by the Maritime Strategy for the Atlantic Ocean Area should be fully utilised. This type of investment will create quality employment particularly in the construction industry and innovative enterprises, especially in rural and coastal areas. In order to facilitate the positive effects on the labour market, the investments should be supported by building up relevant skills in the labour force. As regards the distribution of renewable energies, the development and deployment of intelligent metering systems and smart grids should be fostered, with the corresponding provision of training in order to meet the skill development needs in this area. Attention should also be paid, both nationally and transnationally, to increasing energy efficiency. This can be achieved with investments in energy retrofitting in public buildings and housing, energy efficiency measures in the business sector, including in transport, industry, agriculture and food processing, as well as the promotion of ecoinnovation in SMEs. Measures should be undertaken to enhance the carbon sequestration (e.g. through afforestation, maintenance and/or restoration of permanent grassland and peat-land) and to reduce the GHG emissions from agriculture. 2.3.2 Improved management of natural resources and environmental protection Resource-efficiency needs to be reinforced by the promotion of sustainable management of natural resources, in particular through measures designed to improve the quality of water in Ireland (especially with regard to a reduced use of fertilizers and pesticides), restoration, preservation and enhancement of biodiversity (including in Natura 2000 and high nature value areas), sustainable land and soil management, reduction of air pollution, flood prevention and sustainable management of coastal zones. The reform of the Common Fisheries Policy should bring about sustainable fishing for maritime and fisheries sectors and foster the economic development of fishing communities. To foster growth in fisheries dependent regions, public funding should, especially within the framework of the Maritime Strategy for the Atlantic Ocean Area, focus on rebuilding fisheries resources, generating further added value and diversifying fisheries activities into other sectors of the marine economy. In order to promote growth in fisheries and dependant regions CSF Funds should focus on rebuilding fisheries resources, generating further added value and diversifying fisheries activities into other sectors of the marine economy. 12 3. SUCCESS FACTORS FOR EFFECTIVE DELIVERY The new Common Provisions Regulation will set out ex-ante conditionalities which are preconditions relating to the effective and efficient use of EU Funds which should be fulfilled by the time a programme is approved. In order to ensure a smooth start to programmes, Ireland is encouraged to carry out the assessment process set out in the regulation. The Irish authorities should identify the exante conditionalities which are likely to be applicable and specify a timetable for their finalisation. They are encouraged to enter into dialogue with the Commission on potential gaps, before the formal submission of programmes. The Commission will formally examine the consistency and adequacy of the information provided by the Member State in the framework of its assessment of the Partnership Agreement and programmes. Based on experience from the current programming period and the CSRs the Commission Services have identified a number of ex-ante conditionalities critical for successful implementation of the above funding priorities. The Irish authorities need to take actions to fulfil the pre-conditions for successful spending in each of the following areas before the start of the next programming period: • The existence of a national or regional research and innovation strategic policy framework for smart specialisation, where appropriate, in line with the National Reform Programme, to leverage private research and innovation expenditure; The strategies should specify the research areas in which CSF funding should be concentrated and provide an indicative timeframe for implementation and lay down success criteria; • Active labour market policies are designed and delivered in coherence with Employment Guidelines; • In fisheries, the ex ante conditionalities refer to a multi-annual national strategic plan for aquaculture, administrative capacity for Data Collection and the implementation of a European Union control, inspection and enforcement system. On Data Collection, Ireland should pursue its efforts to improve data quality and availability in order to ensure a smooth shift from direct to shared management. As regards fisheries control, Ireland should continue its efforts to ensure the control of the implementation of CFP rules. Where ex-ante conditionalities are not fulfilled by the time of submitting the Partnership Agreement to the Commission, Ireland will need to lay down a series of actions to be taken at national and regional level and a timetable for implementing them. All ex ante conditionalities need to be fulfilled by the deadline agreed and at the latest within two years of the adoption of the Partnership Agreement or by 31 December 2016. 4. PRIORITIES FOR EUROPEAN TERRITORIAL COOPERATION Effective solutions in many areas of development require a cooperative approach to challenges and opportunities that looks across borders to share experiences. This should reinforce and complement cross-border and transnational perspectives to be considered in country-specific programming and should also take account cooperation frameworks such as the Maritime Strategy for the Atlantic Ocean Area. Ireland would therefore benefit from cooperation through the ETC programmes in the following areas: 13 – Fostering innovation clusters and smart connections between business, research and higher education sectors; – A focus on results-oriented innovation projects which include actors from beyond the usual scientific and academic partners; – Develop eco-innovation projects, including a comprehensive observation of the ocean environment; – Encourage co-operation, sharing of best practice and economies of scale between Irish SMEs and those from other Member States; – Promote energy efficiency and the production, distribution and use of renewable energy; – Addressing shared environmental risks, particularly maritime pollution, across borders; – Contributing to leverage the maritime economic potential of the maritime border areas by bringing about cooperation synergies. The transnational dimension of the Atlantic strategy can bring new dynamism to the maritime economic sectors as well as enlarge their economies of scale. The Commission proposes to take on board the priorities resulting from the on-going Atlantic Forum and will request Ireland to outline its plans and intentions for contributing to the Atlantic Marine Strategy. In the context of the peace process and the complex reconciliation issues in Northern Ireland and the border counties of Ireland, a potential PEACE programme should address the specific and complex challenges related to social inclusion, youth work, education and capacity building for a shared future for the communities in the eligible areas. 14 ANNEX The annex contains the arrangements for effective programming and delivery, assessment of funding needs in relation to thematic objectives and assessment of specific aspects of administrative capacities. (a) Arrangements for effective programming and delivery Experience from previous programming periods indicates several factors affecting effectiveness of investment, in particular the need for strategic orientation and concentration, the need to avoid fragmentation of investments, projects insufficiently embedded in national systems, weak response to the actual needs, and low European value added. A general shift towards more coherent and innovative approach is necessary in order to demonstrate clearly the impact on attaining the Europe 2020 objectives. The structure of the operational programmes (OPs) should also reflect the focus of EU interventions on Europe 2020 objectives. The balance of funding, the number of programmes and the most suitable architecture will be developed in partnership with stakeholders in Ireland and in negotiations with the Commission. Cooperation at all levels is key to achieving quality of spending. The proposed 2014-2020 legislation for the CSF funds offers additional flexibility to set up programmes in each Member State to best match their institutional set-up. Cooperation at all levels is essential to achieving quality of spending. Annex I of the Commission's amended proposal for the Common Provisions Regulation12 includes elements of the Common Strategic Framework and sets out different options for integrated approaches to programming, to achieve coordination and synergies during implementation. Ireland is encouraged to explore these options. The structure of programmes should take into account the division of competences for relevant policies between regional and national level. Distribution of responsibility between national and regional levels should ensure overall coherence while respecting local conditions. As far as ESF is concerned, the current model of implementation has proven to ensure the necessary coordination and delivery of desired results. Monitoring and evaluation systems need to be adjusted to the requirements of the new regulations particularly in relation to performance frameworks and result orientation. CSF funding will need to be linked to performance frameworks that can be validated, and able to show a clear link between CSF-funded intervention and results on the ground. This is true for both country-specific and co-operation programmes which should reinforce each other in a complementary fashion. The Irish authorities will need to consider the implications of this requirement on prospective arrangements for periodic reporting to programme monitoring committees, the submission of annual reports and evaluation arrangements. 12 COM(2012) 496 final, 11.9.2012 15 Coordination, complementarity and synergy Coordination between policies and the ensuring of the necessary synergies between - and complementarity of - interventions is a key condition for successful implementation of CSF Funds. Such synergies will also need to take into account transnational and seabasin development approaches. Government Departments and managing authorities responsible for the implementation of the CSF Funds should work closely together on the preparation, implementation, monitoring and evaluation of the Partnership Agreement and programmes. It is essential that all funds operate in an integrated way at the delivery level, nationally and transnationally. Within a single OP for the EMFF as stipulated by the EMFF regulation, it will be important to ensure synergies with regional interventions of other funds. Support to fish catching sector should contribute to an effective reduction in fishing capacity. Complementarities between CSF Funds should be designed at policy level and put into effect through specific implementation solutions, including, where relevant, Integrated Territorial Investments and Community-led Local Development and sea-basin initiatives. Ireland is invited to present its approach and corresponding instruments as regards a coordinated use of funds in areas, where complementarities of funds are critical for efficient investment: education (especially vocational training system) and entrepreneurship. Where relevant, the CSF Funds should exploit potential for synergies – both within the country and in a broader geographical context - with the other EU instruments, such as the Connecting Europe Facility, the Programme for the Competitiveness of Enterprises and Small and Medium-sized Enterprises (COSME), Horizon 2020, the European Institute of Innovation and Technology (EIT) and its Knowledge Innovation Communities (KICs) in view of increasing their countries' innovation capacity through a closer integration of the Knowledge Triangle, Marie Sklodowska-Curie Actions, the LIFE programme, Erasmus for All, the Creative Europe Programme, the Programme for Social Change and Innovation, the next Framework Programme for Research and Innovation and the Asylum and Migration Fund, Youth on the Move and actions undertaken within the context of the Agenda for New Skills and Jobs. Community-led Local Development (CLLD) offers an integrated bottom-up approach in response to complex territorial and local challenges through the involvement of local communities. Ireland is invited to present its approach as regards CLLD across the CSF Funds indicating the main challenges, objectives and priorities, the type of territories, the role of local action groups and coordination mechanisms. Ireland should also indicate the way preparatory support will be made available for local actors. (b) Assessment of funding needs in relation to thematic objectives The following sections present the Commission Services' view on priorities for CSF Funds for Ireland. They have been developed on the basis of the Commission services in depth country analysis13 and selected from the 11 thematic objectives, which stem from the Commission proposal for the Common Provisions Regulation14 for CSF Funds adopted by the Commission on 6 October 2011. These 11 thematic objectives translate the Europe 2020 strategy into operational objectives to be supported by the CSF Funds. 13 Staff Working Document ref: SWD/2012/0316 final of 30 May 2012 14 COM(2011)615 final/2; http://ec.europa.eu/regional_policy/what/future/proposals_2014_2020_en.cfm#1 16 The 11 thematic objectives are common for cohesion, rural development and the maritime and fisheries policies; they ensure that interventions under these policies are aligned towards the achievement of joint objectives, those of Europe 2020. They provide a menu of possible funding objectives for the whole of the EU. According to each Member State's specific situation a more focussed selection is then made in agreement with the national authorities. The challenges and funding areas for Ireland correspond to the following thematic objectives: Funding priorities Related thematic objectives Combatting long-term and youth Promoting employment and supporting unemployment and social exclusion labour mobility Promoting social inclusion and combatting poverty Investing in education, skills and lifelong learning Promote R&D investment and the Strengthening research, technological competitiveness of the business sector development and innovation Enhancing the competitiveness of small and medium-sized enterprises, the agricultural sector and the fisheries and aquaculture sector. Promotion of environmentally-friendly Supporting the shift towards a low-carbon and resource efficient economy economy in all sectors; Promoting climate change adaptation, risk prevention and management; Protection of the environment and promoting resource efficiency FUNDING PRIORITY: COMBATTING LONG-TERM AND YOUTH UNEMPLOYMENT AND SOCIAL EXCLUSION The objectives of the funding priority "Combating long-term and youth unemployment and social exclusion" will be achieved primarily by thematic objectives "Promoting employment and supporting labour mobility", "Promoting social inclusion and combatting poverty" and "Investing in education, skills and lifelong learning." Thematic objective: Promoting employment and supporting labour mobility Country specific recommendation: The only recommendation proposed by the Commission in 2012 for Ireland was related to the implementation of the conditions set out in the memorandum of understanding. "Implement the measures laid down in Implementing Decision 2011/77/EU and further specified in the Memorandum of Understanding of 16 December 2010 and its subsequent supplements." The employment and social related conditionalities set out in the MoU mostly concern pension sustainability and structural reforms to tackle long-term unemployment through measures to improve the effectiveness and efficiency of labour market institutions and to reform the benefit system to create financial incentives for employment. More 17 specifically the 5th update of the Memorandum of Understanding states that the Irish authorities will ensure that activation services are enhanced to tackle the high and persistent rate of unemployment. In particular the ,Department of Social Protection will take steps to improve the ratio of vacancies filled off the live register, focus on retraining the unemployed to reduce the risk of long term unemployment and ensure appropriate incentives through the implementation of sanctions For this thematic objective, the funding priority translates into the following priorities and specific objectives reflecting country specific challenges to be supported by the CSF Funds: (1) Access to employment for job-seekers and inactive people, including local employment initiatives and support for labour mobility: • Support the unemployed, with a particular focus on the long-term unemployed, to access employment; • Improve qualification levels of low skilled unemployed, with a particular focus on low skilled long-term unemployed; • Support women to (re)integrate into the labour market (2) Sustainable integration of young people not in employment, education or training (NEET) into the labour market • Support NEETS to participate in training programmes which include work experience with labour market relevance; • Support the introduction of the youth guarantee that aims at offering support to young people not in employment, education and training within 4 months of leaving school. (3) Modernisation and strengthening of labour market institutions, including actions to enhance transnational labour mobility. • Support the development of skills of PES staff (4) Facilitating diversification and job creation in rural areas • Targeted measures to stimulate up-skilling, job creation and entrepreneurship in rural areas, including support to diversification into non-agricultural activities. (5) Facilitating the transition towards new skills and jobs in the context of required structural adjustment (e.g. in the marine economy) from fisheries and related activities towards aquaculture, marine tourism and marine biotechnology, with reference to Atlantic Strategy as appropriate: • Support for quality job creation in coastal communities through adding value to fisheries and aquaculture, diversification of small scale fishing and marine aquaculture. 18 Actions under this thematic objective may contribute, if relevant, to related interventions under the thematic objectives aimed at strengthening research, technological and innovation, enhancing the competitiveness of SMEs, supporting the shift to a low-carbon economy, promoting climate change adaptation, risk prevention and management, protecting the environment and promoting resource efficiency, promoting social inclusion and combating poverty and investing in educational skills and lifelong learning.15 Thematic objective: Promoting social inclusion and combating poverty In the Memorandum of Understanding, the Irish authorities commit to the enhancement of activation services and the focus on retraining of the unemployed to reduce the risk of long-term unemployment. For this thematic objective the funding priority translates into the following priorities and specific objectives reflecting country specific challenges to be supported by the CSF funds: (1) Active inclusion • Support people in poverty or at risk of poverty and social exclusion to access counselling, training and other activities, with the aim to bring them closer to the labour market; • Preventative support at an early stage for children and teenagers of vulnerable groups to help them integrate in the labour market and society. (2) Support to basic services and other poverty reduction measures in rural and coastal areas • Provision or adaptation of local basic services for the population, particularly in remote rural and coastal areas including addressing the specific needs of disadvantaged/vulnerable groups; • Fostering community-led local development (CLLD including LEADER local development strategies) and investments in small-scale infrastructure in rural and coastal areas. Local development strategies should contribute to the diversification into non-agricultural activities and non-fisheries and the creation of job opportunities in rural and coastal areas; • Promotion of entrepreneurship and skills acquisition of people at risk of poverty in rural and coastal communities. Actions under this thematic objective may contribute, if relevant, to related interventions under the thematic objectives aimed at enhancing the competitiveness of SMEs, supporting the shift to a low-carbon economy, risk prevention and management, 15 Thematic objectives 1,3,4,5,6,9 and 10 according to the draft Common Provisions Regulation (COM(2011) 615 final). 19 promoting employment and supporting labour mobility and investing in educational skills and lifelong learning.16 Thematic objective: investing in education, skills and lifelong learning For this thematic objective the funding priority translates into the following priorities and specific objectives reflecting country specific challenges to be supported by the CSF funds: (1) Reducing early school-leaving and promoting equal access to good quality earlychildhood, primary and secondary education: • Support early school leavers and low skilled people to gain upper secondary education and to reduce low achievement in basic skills. (2) Lifelong learning, training and advisory services for farmers, seafarers and rural population • Support to the lifelong learning and up-skilling of farmers and seafarers through vocational training and skills acquisition in new technologies specific to the marine industry, agriculture and forestry; • Support the transfer of knowledge, in particular on good farm and forestry management practice; • Support to the lifelong learning and up-skilling of the rural and coastal populations through trainings focused activities and skills permitting diversification (including entrepreneurship) and responding to labour market needs. The trainings provided should aim to improve the match between skills supply and labour force requirements. Actions under this thematic objective may contribute, if relevant, to related interventions under the thematic objectives aimed at enhancing the competitiveness of SMEs, promoting employment and supporting labour mobility and promoting social inclusion and combating poverty.17 FUNDING PRIORITY PROMOTION OF R&D INVESTMENT AND THE COMPETITIVENESS OF THE BUSINESS SECTOR The objectives of the funding priority "Promotion of R&D investment and the competitiveness of the business sector" will be achieved primarily by thematic objective "Strengthening research, technological development and innovation" as well as thematic 16 Thematic objectives 3, 4, 6, 8 and 10 according to the draft Common Provisions Regulation (COM(2011) 615 final). 17 Thematic objectives 3, 8 and 9 according to the draft Common Provisions Regulation (COM(2011) 615 final). 20 objective "Enhancing the competitiveness of small and medium-sized enterprises, the agricultural sector and the fisheries and aquaculture sector." Thematic objective: Strengthening research, technological development and innovation For this thematic objective, the funding priority translates into the following priorities and specific objectives reflecting country specific challenges to be supported by the CSF funds: (1) Promotion of business R&I investment, product and service development, technology transfer social innovation and public service applications, demand stimulation, networking, clusters and open innovation both nationally and in broader cross-border perspectives and through smart specialisation: • Support product and service innovations where necessary through use of the Commercialisation Fund sponsored by Enterprise Ireland and exploiting opportunities arising from participation within European Innovation Partnerships (EIP) and Knowledge Innovation Centres (KICs) linked to the European Institute of Technology (EIT); • Support innovation and eco-innovation in particular in SMEs, by supporting applied research, proof-of-concept and investing in pilot lines and early product validation actions including advanced manufacturing capabilities and first production in new technologies, in particular Key Enabling Technologies and diffusion of general purpose technologies, while minimising projects involving pure technology transfer from abroad and replacement of production lines/facilities; • Support service innovation and innovative start-ups required for deployment of technology and co-creation of innovative products and services which are resulting from the applied research; • Support Joint programming Initiatives as well as the participation in, or capacity building for, public-public partnerships under Horizon 2020 (ERA-NETS and Article 185 initiatives); • Co-operation and knowledge transfer between universities/research institutions (both national and from abroad) and the private sector including the agriculture, agri-food, aquaculture and fisheries sectors, as well as maritime industries. (2) Enhancing innovation in the SME sector • Promoting entrepreneurship, in particular by facilitating the economic exploitation of new ideas and fostering (where necessary through incubation space and services available on Irish campuses) the creation of new firms in both national and broader regional and EU contexts; • Develop tailor-made offer of financial instruments for innovative, highgrowth companies, including loans and guarantees, equity funding for early stage and growth investments, bridge financing and incentives for venture capital development; 21 • Promoting innovation and eco-innovation by means of appropriate linkages with business and by support for applied research, proof of concept and early product validation including support for advanced manufacturing capability particularly within Key Enabling Technologies; • Stimulate and ensure sufficient funding for undertaking public procurement of innovation in the key public sector areas (social innovation and public service applications such as health, e-government, low carbon buildings and energy efficiency) using the whole spectrum of tools offered under the EU procurement rules; • Stimulate co-operation between business, including in the agricultural, agro-industrial, forestry, maritime, fisheries and aquaculture sectors, and knowledge institutions and foster the development of strategic clusters. Explore the potential for growth in marine sectors linked to the Blue Growth initiative nationally and internationally; • Support and enhance cluster policy and the quality of business networks, including by building on existing technological and science parks and clusters. Focus on high quality services (full package of services required by innovative companies including support to commercialisation, technical services, accounting, taxation, consulting), multi-cluster strategies and collaboration with other national and international clusters and universities to attract or create innovative businesses and enhance open innovation, including support for the establishment and operation of Regional Maritime Clusters as drivers of Blue Growth and for the transfer of marine knowledge and technology to industry. Actions under this thematic objective may contribute, if relevant, to related interventions under the thematic objectives aimed at enhancing the competitiveness of SMEs, promoting employment and supporting labour mobility, promoting social inclusion and combating poverty and investing in educational skills and lifelong learning. 18 Thematic objective: Enhancing the competitiveness of small and medium-sized enterprises, the agricultural sector and the fisheries and aquaculture sector For this thematic objective, the funding priority translates into the following priorities and specific objectives reflecting country specific challenges to be supported by the CSF funds: (1) Promoting entrepreneurship, in particular by facilitating in both the national and cross-border perspectives the economic exploitation of new ideas and fostering the creation of new firms • Encouraging entrepreneurship through the provision of a wide range of business support measures – including business support measures typically provided by the Ireland-wide network of County/City Enterprise Boards and/or local authority service providers – these include advice on start-up , 18 Thematic objectives 3, 8, 9 and 10 according to the draft Common Provisions Regulation (COM(2011) 615 final). 22 business planning, product/service innovation, innovation vouchers in additional to access to capital where necessary through the system of repayable grants deployed in Ireland; (2) Developing new business models for SMEs, in particular for internationalisation: • Enhancing the competitiveness of SMEs (including aquaculture, fisheries and maritime sectors) and agricultural holdings through the delivery of the necessary range of business support measures designed to encourage innovation of products, product design, resource efficiency and service delivery, raising innovation awareness and encouraging the development of clusters to meet the specific objectives of smart specialisation; • Provision of access to capital for SMEs (including agricultural and fisheries/aquaculture holdings) at their various stages of development; • Development of innovation solutions in particular in the areas of Key Enabling Technologies and major societal challenges such as climate change, biodiversity energy and resource scarcity, health and ageing. Actions under this thematic objective may contribute, if relevant, to related interventions under thematic objectives aimed at strengthening research, technological and innovation, promoting employment and supporting labour mobility, promoting social inclusion and combating poverty and investing in educational skills and lifelong learning. 19 PRIORITY PROMOTION OF ENVIRONMENTALLY-FRIENDLY AND RESOURCE EFFICIENT ECONOMY FUNDING The objectives of the funding priority "promotion of an environmentally friendly and resource efficient economy will be achieved primarily by thematic objective "Supporting the shift towards a low-carbon economy" as well as thematic objectives "Protecting the environment and promoting resource efficiency", and Promoting climate change adaptation, risk prevention and management." Thematic objective: Supporting the shift towards a low-carbon economy in all sectors For this thematic objective the funding priority translates into the following priorities and specific objectives reflecting country specific challenges to be supported by the CSF funds (1) Promoting the production and distribution of energy from renewable sources • The promotion of renewable energy generation and supply (in particular wind, biomass energy and marine energy); 19 Thematic objectives 1, 8, 9 and 10 according to the draft Common Provisions Regulation (COM(2011) 615 final). 23 • The development and deployment of smart grids and smart meters and related improvements in distribution networks (with corresponding provision for training in order to meet the skill development needs in this area) (2) Promoting energy efficiency and renewable energy use in SMEs • Targeted measures (involving SMEs, branches of industry (including food processing) and agricultural/forestry sectors) seeking to achieve further gains in energy efficiency, renewable energy use and emissions reductions (3) Supporting energy efficiency and renewable energy use in public infrastructures and in the housing/business/transport sectors. (4) Climate change mitigation measures • Reduction of ammonia, nitrous oxide and methane emissions from agriculture through improved livestock and fertiliser management practices and support for the dissemination of research findings related to climate change mitigation options; • Enhancement of carbon sequestration through afforestation and maintenance and/or restoration of permanent grassland and peat-land. Actions under this thematic objective may contribute, if relevant, to related interventions under the thematic objectives aimed at strengthening research, technological and innovation, promoting employment and supporting labour mobility, promoting social inclusion and combating poverty and investing in educational skills and lifelong learning.20 Thematic objective: Promoting climate change adaptation, risk prevention and management For this thematic objective, the funding priority translates into the following priorities and specific objectives reflecting country specific challenges to be supported by the CSF funds: (1) Supporting dedicated investment for adaptation to climate change • Support for the dissemination of information relating to climate change adaptation through the farm advisory services and other actions; • Support to developing the knowledge-base on adaptation to climate change, monitoring, surveying or mapping to reduce uncertainty; • Support for measures increasing the capacity of the landscape to retain water and reduce the risks of flooding (ecosystem-based adaptation); 20 Thematic objectives 1, 8, 9 and 10 according to the draft Common Provisions Regulation (COM(2011) 615 final). 24 (2) Promoting investment to address specific risks, ensuring disaster resilience and developing disaster management systems • Development of accurate and timely marine forecasting capabilities and infrastructures and marine surveillance initiatives in the Atlantic Region; • Support an improved co-ordination, preparedness and response capability to maritime accidents and related events in the European Atlantic area, especially through cooperation mechanisms between coastal areas from different regions /Member States; • Promote measures to manage the risk of loss of income for agricultural holdings resulting from adverse climatic events; • Support integrated, sustainable development of coastal areas (including coastal and marine pollution protection) within the context of the Atlantic Strategy. Actions under this thematic objective may contribute, if relevant, to related interventions under thematic objectives aimed at strengthening research, technological and innovation, enhancing the competitiveness of SMEs, promoting employment and supporting labour mobility, promoting social inclusion and combating poverty and investing in educational skills and lifelong learning.21 Thematic objective: Protecting the environment and promoting resource efficiency For this thematic objective, the funding priority translates into the following priorities and specific objectives reflecting country specific challenges to be supported by the CSF funds: (1) Improving the quality of water • Support to measures designed to increase the quality of water, in particular related to the implementation of the Water Framework Directive and for actions that lead to a reduction of water pollution (improved fertilizer and pesticide management, protection of watercourses from nitrate pollution). (2) Protecting biodiversity, soil protection and promoting ecosystem services including NATURA 2000 and green infrastructures • 21 Support to the restoration, preservation and enhancement of biodiversity, in particular the grassland, forest, heath and scrub habitats, by the promotion of environmentally sound farming and forestry systems, especially in NATURA 2000 areas and other high nature value areas; Thematic objectives 1, 3, 8, (COM(2011) 615 final). 9 and 10 according to the draft Common Provisions Regulation 25 • Support the transition to environmentally sustainable fisheries (though measures to achieve Maximum sustainable Yield and support discard ban, improvement of data collection for resource conservation purposes, strengthening the control of the implementation of CFP rules) as well as eco-innovation (innovation reducing impact on environment) and aquaculture with high level of environmental protection. Ireland also needs to evaluate and identify and remaining over-capacity in its fleets in order to phase it out; • Measures targeting the quality of soils in Ireland, in particular payments for actions that would reduce the damage caused to soils by agricultural activities; • Support the use of integrated maritime policy tools for sustainable growth and competitiveness (such as marine knowledge, maritime spatial planning and integrated coastal zone management and integrated maritime surveillance) as well as the sustainable exploration and exploitation of seabed resources. Actions under this thematic objective may contribute, if relevant, to related interventions under thematic objectives aimed at strengthening research, technological and innovation, enhancing the competitiveness of SMEs, supporting the shift to a low-carbon economy, promoting employment and supporting labour mobility, promoting social inclusion and combating poverty and investing in educational skills and lifelong learning.22 22 Thematic objectives 1, 3, 8, 9 and 10 according to the draft Common Provisions Regulation (COM(2011) 615 final). 26 ADMINISTRATIVE ARRANGEMENTS General assessment of administrative capacities Ireland has a long experience of managing Structural and Cohesion Funds. In terms of ERDF it is worth noting that the managing authorities exercise little responsibility in the area of direct assistance management although, during the 2007-2013, some low-level operations in the sphere of sustainable urban development have been managed directly by the managing authority. The capacity of the ESF managing authority is considered to be very good. This, inter alia, is demonstrated by the fact that the national ESF programme has achieved high commitment and the highest absorption rate of ESF money in the EU 27 by the end of 2011. The Department of Agriculture, Food and the Marine has demonstrated its capacity to manage effectively the Rural Development Programme. Those services responsible for implementation and controls should ensure an effective and efficient control environment and be able to confirm the operationality of its control systems. Presently, ERDF is generally managed by State departments acting in a capacity of Intermediate Body on the basis of funding allocations decided by government (Department of Public Expenditure and Reform). The issuing of interim and final payment claims follows the operation of the so-called cascade system. Lead times for the certifications of expenditure are long – ways and means of reducing these lead times should be examined. There is a case for simplifying the cascade management system by recognising the specific role and function of the Public Beneficiary Body as a secondlevel Intermediate Body. As regards the ERDF Certifying Authority, it is recommended that a clear segregation of duties be ensured between checking the substance of the information provided by the different levels of the cascade system, preparing the statements of expenditure and their submission to the Commission, and dealing with the accounting system and IT issues. As regards ERDF the merging of CA and MA could be considered as a solution for this issue in Ireland. Project delivery Financial instruments could play an important role in the delivery of EU policy objectives by providing more flexible and sustainable forms of financing and attracting private sector investors with a significant multiplier effect on public resources and improving access to financing for CSF beneficiaries. They contribute to making financing of public policies more effective and sustainable, thus helping Member States to face their long-term challenges and increasing the long term impact of the policy. With the support of the 2014-2020 CSF funds, particular effort should be made to optimise use of financial instruments by deploying them more widely in sectors where they are particularly suitable and where an ex-ante assessment has established evidence of market failures or sub-optimal investment situations. In addition to the extensive use of these instruments to support investments in SMEs, they should also be more widely used for investments in projects which have a demonstrated capacity to pay back the whole or part of the resources invested, including 27 for promoting integrated urban development operations and for promoting energy efficiency, Administrative burden The management and control systems for 2014-2020 should build on the positive achievements in the period 2007-2013. For the CSF Funds Ireland is nonetheless encouraged to reflect on how sound financial management could be further enhanced by improving simplification, flexibility, better coordination of funds and programmes and by cutting administrative costs and burden for the beneficiaries and, for cohesion policy, by using further e-Cohesion possibilities. Partnership In line with past experience, the Irish authorities will carry out a wide public consultation (including social partners) on any future 2014-2020 operational programmes. It is likely that consultation will equally be carried out on the Partnership Agreement. It should consider both national and transnational perspectives. In view of the importance of proposals in terms of deepening the commitment to HEI research, SME sustainability and renewable energy, there is a clear case for ERDF PMC membership of relevant programmes to be adjusted to ensure appropriate participation by higher education, private sector, NGO, environmental and local community interests. The specific requirement for fixed percentage investment in sustainable urban development through Integrated Territorial Investments also calls for appropriate governance, management and monitoring arrangements reflecting regulatory requirements. The prospective role of urban actors (local authorities, community representatives) and their place in governance and monitoring arrangements will need to be defined during negotiation. 28
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