Improving the Synergies between the Structural
Funds and the Lisbon Strategy
Speech at the UK EU Presidency Conference on Regional and Rural Development
Programmes “Delivering the Lisbon and Göteborg Agendas”, Newcastle 7 - 8
Jens Henrik Haahr
Senior Consultant, Ph.D.
Danish Technological Institute
In the year 2000, the heads of state and government of the European Union proposed a bold
new strategy for re-invigorating economic and social development in Europe.
The Lisbon Strategy was greeted with reluctance at the time. The experiences with previous
attempts at ambitous reform agendas in the Union did not encourage too much optimism.
Many would claim that the sceptics have been proven right. The European Union has not
managed to reverse trends and increase growth during the past 5 years. Employment rates
and indicators on innovation and entrepreneurship remain stuck at less than encouraging
Yet the Lisbon Strategy, with all its flaws, continue to be the most coherent and comprehensive
statement of a European political consensus that we have witnessed.
The objectives are broad and there are tensions within them. Can we promote growth and
environmental sustainability at the same time Will structural reform endanger social
inclusion Nevertheless, the strategy defines a number of priority areas for investment and
economic development, and it specifies the areas in which significant reforms are required. It
also establishes a system of voluntary co-operation, the Open Method of Coordination, in
which the Member States can co-operate in a systematic way in a large number of new
18 months ago, the Danish Technological Institute was contracted by the European
Commission to investigate the process of implementing the Lisbon Strategy, and to shed
light on the ways in which the Union’s Structural Funds have contributed and can contribute
to achieving the Lisbon Goals. Our objective was to formulate recommendations on ways in
which complementarities between the Funds and the Strategy can be better exploited.
Our approach to this task had several elements.
• We investigated the status and significance of the Lisbon Strategy in 11 Member States.
• We analysed the activities and results of the Structural Funds in these states, and the
interaction with the Lisbon Strategy and its objectives.
• Finally, we analysed the economic and political rationales of the Strategy and the
Structural Funds, highlighting potentials for synergy as well as conflicts and tensions
between the two approaches.
Our findings remain valid today, I believe.
Let us first be clear about the Lisbon Strategy: If anyone had believed that the strategy serves
as a very salient and direct policy guideline in the Member States, our analysis proves them
This does not mean that the Strategy is insigificant, but its influence is indirect. As one high
level civil servant put it “Lisbon is like a road that everyone wants to be on. You may want
to be on the left or the right side of the road, but no one wants to leave it altogether. It
defines good manners for European policy making”.
Second, the relation between the Lisbon Strategy and the Structural Funds today reflects that
the overall objectives of the two approaches are in many ways congruent. Both the Lisbon
Strategy and the Structural Funds aim for higher growth and lower unemployment on the
basis of a concern environmental sustainability, to mention the most important areas of
Having analysed Structural Fund expenditure patterns, we concluded that in many regions,
more than 50% of the Structural Funds’ expenditure can be said to be aimed directly at
important objectives in the Lisbon Strategy, with expenditure in Objective 2 regions being
more in line with the Lisbon Strategy than expenditure in Objective 1 regions. We conclude
that the differences in the degree to which Structural Fund expenditure is in line with the
Lisbon objectives reflects different investment needs in Objective 1 and Objective 2 regions.
The Lisbon Strategy is primarily a strategy for increased economic growth. The question on
how to improve the complementarities between the Strategy and the Funds is therefore at the
core a question of how to strengthen the growth contribution of the Structural Funds.
At the same time, it must be recognized that the cohesion principle remains a firm foundation
for the Structural Funds also in the future: The Funds must continue to seek to reduce the
regional disparities within the EU.
I want to address two overall ways in which the Structural Funds may, in the coming
programming period, increase their contribution to the Lisbon objectives and economic
• First is the strategy of promoting the implementation of the Lisbon Agenda with a
specific Structural Fund programme.
• Second is the strategy of increasing the focus on aggregate growth effects in Structural
In our analysis, several other relevant options are considered, but I will not go into these
here. The entire report is still available on the web-site of the European Commission’s DG
Regio, should you be interested.
First the strategy of devoting a Structural Fund programme specifically to the main priorities
of the Lisbon Strategy. This is what appears to have happened with the proposal for the new
Competetiveness and Employment Objective, which is to be launched in 2007, replacing the
present Objective 2 programme.
We highlight a number of important pre-conditions which must be fulfilled, if this approach
is to succeed.
• Our analysis concludes, that if it is the intention of the Competitiveness Objective to
enhance the competitiveness of supported regions, a clear concentration of financial
resources on selected regions is necessary. Otherwise, the impact on competitiveness is
likely to be of limited relevance in the regional and national contexts, considering the
relatively modest resources which are likely to be available for the Objective.
• Second, if the goal of the programme is to stimulate a stronger strategic orientation in the
Member States in relation to the overall Lisbon Agenda, considerable efforts are
necessary to make this happen. We recommend that a direct linkage to national policies
and programmes should be included in the Competitiveness Objective in each Member
State, that the financial resources of the Competitiveness Objective should be
concentrated in selected regions and/ or on a few set of clearly identified themes. Finally,
we recommend that the Member States should make clear commitments to ensure
multiplication and mainstreaming of results and experiences from the Programme.
To sum up, if the Member States want to make efficient use of the new Competitiveness and
Employment Objective, they should concentrate the use of its resources, and they should
integrate the programme with national policy making and national efforts at reform and
The second overall option that I want to address is the strategy of increasing the focus on
aggregate growth effects in Structural Fund support.
The recommendations we put forward in this respect pertain to all three future Objectives in
the Structural Funds, i.e. the Competitiveness and Employment programme, the
Convergence programme and the Territorial Co-operation programme.
• First of all, if the Lisbon Strategy is to be taken seriously in future Structural Fund
programmes, more emphasis should be placed on the growth objectives of Structural
Fund support in the programming process. We need to be clear about the most pressing
problem that Europe is currently facing, and this problem is the problem of too low
economic growth. This should be emphasised more strongly when operational
programmes are being developed in the Member States.
• Second, a stronger emphasis needs to be placed on R&D and Innovation in the coming
programming period. There is solid empirical evidence that the social rates of return on
these types of investment are generally very high. Attention should be increased to these
fields, on a flexible basis and taking local and regional circumstances into account.
• Third, stricter limits should be introduced for support to individual enterprises above the
SME threshold. Support of this kind generally leads to distortion of competition rather
than to higher aggregate growth. Support to individual enterprises should be limited.
• Fourth, we recommend more solid assessments of costs and benefits of Structural Fund
investment. Clearer guidelines should be introduced for ensuring that projects with the
highest social rate of return or the lowest cost/benefit ratio are prioritised.
• Where relevant, the Structural Fund programmes should furthermore increase their
systematic support for the development of basic institutions that are a necessary for
economic growth. Such measures may frequently be measures for improving the
efficiency and reliability of public administration at central and regional levels, in
particular as regards business-related public administration services and business
• The final recommendation I want to highlight is the need to facilitate risk taking and
innovation in Structural Fund measures. Our analysis found evidence of tensions between
innovation and existing financial control routines. New ways of operation need to be
found which allow entrepreneurs and other relevant actors to be innovative and take
risks, even when operating on the basis of Structural Fund support.
I wish to conclude by stating my hope that the Structural Funds will be used efficiently in the
coming years to further the objectives of the Lisbon Strategy.
Policy makers in the Member States should take up the opportunities offered by the
instruments of the Structural Funds and the vision of the Lisbon Strategy.
Making the two play together could inspire confidence that Europe is alive and kicking. But
making the two play together also requires determination and courage. The Structural Funds
offer pleasant possibilities of doing popular things. Why not also use it as a lever for reforms
that may hurt in the short term but benefit our societies in the long term
Thank you for your attention.