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EU Cohesion Policy has been a source of investment in recent decades and has directly created 1.2 million jobs. However, still remain some differences within and between countries, although the European economy is recovering, noted the seventh report on EU Cohesion Policy.

The paper recognizes that in the underdeveloped regions. which includes the majority of Eastern European countries as well as some regions in Southern Europe, the employment rate remains low and the small business makes it difficult to adapt to globalization processes, digitization and new technologies. The public investment is limited to the regions most affected by the crisis in recent years.

This means that EU Cohesion Policy will remain life-saving for many of these regions, reported the European Commission.

“It is clear from the report that European Union needs more convergence”, said the EU Commissioner for Regional Policy, Corina Cretu.

For months, the EU has been debating the future of EU Cohesion Policy after 2020. The current report from the European Commission indicates that the community will need to continue the funds to meet ambitious energy targets and reduce emissions by 2030. The financing of new technologies, infrastructure and employees’ skills is insufficient.

The document suggests that maintaining cohesion policy is needed, but the funds need to be focused in tackling globalization problems by investing in innovation and technology, investing in human capital and business development in the fight against social exclusion and supporting structural reforms, because better administration supports competition, economic growth and increases the impact of investment.

It is needed not only to focus on these specific areas, but also attention to the results, according to the authors of the report. “Programs should be based on specific obligations to be translated into clear performance indicators”, they add.

The report also notes that in the period 2000-2015, underdeveloped regions are progressing rapidly, thanks to the increasing productivity and good performance of industry. However, they are losing employment, and today they are in need of more skilled workers, as well as technology and innovation, to respond to changing global conditions.

The regions with indicators close to the EU average appear to be in the “middle income trap”. With them, the economic growth is below the average for the community, and their industry is weaker than in the underdeveloped and the leading economies of the Union. They also need new technology and orientation to new economic sectors and an increase in export potential.

Public investment declined in the years of the crisis – from 3.4% of the EU’s gross domestic product in 2008 to 2.7% in 2016. In many countries, the reduction in public support is very visible, and the role of these investments is precisely the Cohesion Policy, they also report from the Commission. In the countries that joined the EU between 2004 and 2013, European funds provide funding equivalent to 41% of public investment. For Bulgaria, the level is approaching 50%.

With regard to the EU labor market in 2016, the employment is rising and people in the community between 20 and 64 years go back to pre-crisis levels for the first time. The employment in EU countries reached an average of 71% last year, 1 percentage point above 2008, but below the 2020 targets (75%). Accordingly, unemployment has fallen sharply from the peak in the years of the crisis, but there are also serious disparities across regions. However, youth unemployment also remains a serious problem for the EU.

