Poland Strategic Report 2009 National Strategic Reference Framework Brussels, COCOF, January 28 2010 Ministry of Regional Development

Ministry of Regional Development MAIN ISSUES Changes in the socio-economic situation in Poland - the period 2004-2008 Results of interventions undertaken within the NSRF 2007-2013 Information on the progress of the implementation of the Cohesion Policy Progress in the implementation of the Lisbon Agenda policies The most important actions aimed at improving the effectiveness of the NSRF implementation Challenges in the NSRF implementation National implementation of actions envisaged in the European Recovery Programme Conclusions from the implementation of NSRF in the period 2007-2009 for future of Cohesion Policy after 2013+ Ministry of Regional Development

Ministry of Regional Development ECONOMIC GROWTH (2004-2008) Rate of growth over two-times higher than the EU -27 average In 2009, thanks to the EU funds the rate of GDP growth was higher and amounted to 1.6% (0.7 pp attributed to funds) Poland has one of the lowest GDP per capita figures in the EU. In 2008 it was lower only in: Bulgaria, Romania and Latvia Poland was the only EU country to note positive GDP growth rate in 2009 Thanks to the EU funds the structure of production and exports changed leading to the higher share of more technologically advanced goods. Ministry of Regional Development

Ministry of Regional Development PUBLIC FINANCES (2004-2008) In the period 2004-20088 the state budget’s revenues increased by over 60%. The decisive impact of growing VAT revenues caused by favourable market situation In the period 2007-2008 the share of expenditures incurred for to the co – financing of the EU- financed projects amounted to approx. 8% Expenditures on implementation of projects which were „stimulated” by the EU co-financed investments exceeded 30% of the total development expenditures. Thanks to favourable impact of the EU co-financed programmes domestic structural expenditures on projects financed solely from the Polish sources increased by over 60% (from 25 billion PLN in 2004 to almost 40 billion PLN in 2008) Poland has avoided an excessive growth in development expenditures, which in part protected from crisis Ministry of Regional Development

Ministry of Regional Development LABOUR MARKET (2004-2008) In the period 2004-2008 favourable trends were observed on the labour market: Growth of the employment rate by over 7.5 pp second-best in the EU-27 (following Bulgaria). The said rate is still one of the lowest in the EU. Reduction of the share of agriculture in employment from 18% in 2004 to about 14% 2008. The unemployment rate decreased significantly – from 20% in 2004 to 9,5% at the end of 2008. In the said period Poland achieved the deepest reduction of this indicator (by over 11 pp) of all the EU countries Thanks to the EU funds the number of employed was in 2008, on average, higher by 120 thousand people, and the unemployment rate lower by about 1 pp Ministry of Regional Development

Ministry of Regional Development REGIONAL DISPARITIES (2004-2008) In the period 2004-2008 External convergence accelerated and all voivodeships bridged part of the gap towards the EU-27 average. Because of the richer voivodeships’ faster growth the distance between them and the poor voivodships has widened Thanks to the EU funds in the period 2007-2008 the rate of per capita GDP growth in the period was higher by approximately 0.8 pp. The rate of said growth was higher in poorer regions, which allowed to slow down the growth in disparities Changes to the national average (Poland = 100) pp Ministry of Regional Development

Ministry of Regional Development SOCIAL COHESION IN THE REGIONS (2004-2008) The employment rate increased in all voivodeships, with the highest growth observed in świętokrzyskie (11.5 pp) The sectoral structure of employment was undergoing favourable changes. In the poorest regions, the share of agricultural employment declined by over 8 pp At the same time unemployment decreased in all regions (with largest decline in dolnośląskie voivodeship) Labour productivity, measured by GDP (at PPS) per worker stood at 63% of the EU average, and it was only 1.4% higher than in 2004 Ministry of Regional Development

Ministry of Regional Development NSRF 2007-2013 - priorities Strategic objective: creating conditions for increasing competitiveness of the knowledge­‑ based economy and entrepreneurship to ensure employment growth and an increase in the level of social, economic and spatial cohesion. Objective 1: Improving the functioning standard of public institutions and development of partnership mechanisms Objective 2: Improving the human capital quality and enhancing social cohesion Objective 3: Building and modernizing technical and social infrastructure of fundamental importance for improving the competitiveness of Poland Objective 4: Improving the competitiveness and innovativeness of enterprises, especially in the manufacturing sector with high value added and development of the services sector Objective 5: Increasing the competitiveness of Polish regions and preventing their social, economic and territorial marginalization Objective 6: Balancing development opportunities and supporting structural changes in rural areas. Ministry of Regional Development

Ministry of Regional Development PROGRESS IN ACHIEVING THE NSRF’S OBJECTIVES Though in 2008 the impact of EU support on economic growth became more pronounced than previously, it will be the strongest in the period 2012-2014 The EU funds contribute also to growth in employment rate and decline in the unemployment rate. In 2008 the employment rate was higher than in the base scenario (one which assumes lack of the EU funds intervention) by between 0.2 pp (IBS) – and 0.5 pp (IBnGR/Prevision), while the unemployment rate was lower – thanks to the EU funds – by between 0.02 pp 0.8 pp, respectively In the first few years of Poland’s EU membership the impact of the EU Funds’ expenditure on labour productivity wasn’t significant – mostly due to the fact that the said resources were earmarked chiefly for creating new jobs. Evaluation research indicates that the EU-15 countries (the net contributors to structural funds) also benefit from the cohesion policy’s implementation in Poland The implementation of the cohesion policy in Poland will bring 25 billion euro in additional exports from the EU-15 countries to Poland in the period 2004-2015 (of which almost 50% will benefit Germany) Additional reference to the Polish import to the EU15 countries, contributions to the EU budget (net) under the cohesion policy (e.g.. each Euro paid into the EU Budget by Germany - about 61 cents goes back to the German economy) Ministry of Regional Development

Ministry of Regional Development PROGRESS IN ACHIEVING THE NSRF’S OBJECTIVES Thanks to the implementation of the NSRF there were favourable changes observed in the functioning of the public institutions. Introduction of the number of solutions which belong to the canon of the cohesion policy management : monitoring, evaluation, strategic programming About 0. 5 million employees received training co-financed from the ESF, of which 66% were employed in SMEs Of the 180 thousand companies which received support from the ESF, 94% were from the SMEs sector Out of over 701 thousand unemployed who received support from the ESF, 42% found a job, and another 16% have decided to start their own business Over 75% of newly created jobs, are classified as „durable”: they existed two years since the completion of projects Ministry of Regional Development

Ministry of Regional Development PROGRESS IN ACHIEVING THE NSRF’S OBJECTIVES Thanks to the implementation of projects co-financed from the EU funds 5081 km of roads (including 263 km of motorways and 392 km of expressways) were built and modernized as were 636 km of railway lines, while 93 rail vehicles were purchased (additionally 160 pieces of such equipment were modernized) Effects of the cohesion policy in the sphere of environmental protection infrastructure are difficult to measure (particularly when the improvement of the quality of surface waters is concerned) and their will become fully evident after the implementation of the largest projects. However in this period manage to build and modernise 138 sewage treatment plants and more than 3,5 thd km of water pipes and 4,9 thd km sewerage network Evaluation research underline big impact on job creation of the projects undertaken in the field of water and sewage management system and in the area of waste management (according to preliminary date each million euro from the Cohesion Funds generates „durable” jobs) Ministry of Regional Development

Ministry of Regional Development PROGRESS IN ACHIEVING THE NSRF’S OBJECTIVES No significant net effects were observed in terms of structural funds’ impact on the enterprises expenditures on R&D. Evaluation research points out to relatively high deadweight effect in case of direct support for enterprises Nevertheless, the majority of companies benefiting from the UE funds support notes significant increase in the basic economic indicators (sales, profitability, etc..) Structural funds interventions affected the growth in revenues and financial results of companies in different ways: the financial performance of companies in the field of construction, hotels and restaurants, education and health, was significantly better than in the case of companies operating in these sectors without the fund support. Access to resources earmarked for supporting international partnership on the institutional level as well as on the social level, under the framework of territorial cooperation allowed the cooperation on regional and local level to strengthen with the passage of time Ministry of Regional Development

Ministry of Regional Development PROGRESS IN ACHIEVING THE NSRF’S OBJECTIVES Territorial cooperation pursued by the Polish regions, particularly in its cross-border dimension, has positive impact on building social and economic ties also with regions outside of the Community Thanks to the implementation of the cohesion policy, favourable labour market changes - as evidenced by growth in the employment rate and systematic decline in the unemployment rate- were also taking place in the rural areas. Agricultural activity constituted the main source of income (that is over 50% of the total household income) only for about 25% of farms (2007 data). The main sources of income were: paid employment as well as pensions and retirement benefits. Slow restructuring process of the Polish agriculture is caused, among other factors, by the fact that relatively small monetary transfers such as direct payments under the CAP are not sufficiently tied to modernization and to improved labour productivity. Ministry of Regional Development

Ministry of Regional Development VALUE OF PAYMENTS AND IMPLEMENTATION OF CO-FINANCING CONTRACTS The allocation for Poland for the cohesion policy implementation in the financial perspective 2007-2013 amounts to 67.3 billion EUR, of which: national OP: 48 billion EUR regional OP: 16.55 billion EUR performance reserve:1.33 billion EUR European Territorial Cooperation: 0.73 billion EUR Since the beginning of the programming period 3.6 billion EUR have been transferred. Ministry of Regional Development

VALUE OF PAYMENTS AND IMPLEMENTATION OF CO-FINANCING CONTRACTS– national OP Value of co-financing contracts as the percentage of allocation National Operational Programs, 2007 – September 30th 2009 Applications for co-financing over 87 thousand Of the total of almost 47 billion EUR Co-financing contracts 19.6 thousand Of the total value of 12.7 billion EUR OP Infrastructure and Environment – the largest total value of contracts, OP Innovative Economy – the biggest allocation (33%) Ministry of Regional Development 15

VALUE OF PAYMENTS AND IMPLEMENTATION OF CO-FINANCING CONTRACTS – regional OP Value of contracts for co-financing as the percentage of allocation Regional Operational Programmes, 2007 – September 30th 2009 Co-financing contracts the value of 3.1 billion EUR (19% of the allocation for the said programmes) The most advanced voivodeships: łódzkie, lubuskie, opolskie Total value of expenditures declared to the EC – 1.5 billion EUR (2,4% of the allocation) Ministry of Regional Development

VALUE OF PAYMENTS AND IMPLEMENTATION OF CO-FINANCING CONTRACTS - COMPARISON OF THE FIRST TWO YEARS OF THE OPS IMPLEMENTATION 2007 First year of implementation 2008 Second year of implementation Applications for co-financing over 600 For the total of about 130 million EUR about 39 thousand For the total of almost 17 billion EUR Co-financing contracts 43 For the total of about 90 million EUR almost 4.5 thousand For the total of 1.4 billion EUR From the year 2007 to the year 2008: The number of applications for co-financing increased by 65-times The number of co-financing contracts signed increased by 104-times Ministry of Regional Development

Ministry of Regional Development PROGRESS IN THE LISBON STRATEGY OBJECTIVES ACHIEVING In the 2007-2013 financial perspective compared to the period 2004-2006 there was a considerable increase in expenditures related to the implementation of the renewed Lisbon Strategy. These expenses included: transport and energy infrastructure, unlocking potential for innovation, high quality work in the area of R&D, effective investments in knowledge and modern education and training systems, increase adaptability to changes in the labour market, the efficient instruments of active labour market policy. Implementation of the Lisbon Strategy under the NDP 2004-2006 and under the NSRF 2007-2013 Most of the LS objectives is carried out under the OP IE, the second major program is the OP HC. Ministry of Regional Development

Ministry of Regional Development PROBLEMS IN COHESION POLICY IMPLEMENTATION Problems in the coordination of the activities implemented under the Cohesion Policy and the CAP - a demarcation line Fragmentation of cohesion policy. A consequence of the principle monofund, at the national level is the existence of separate systems, the implementation of the ERDF and ESF Problems in the coordination of national and regional programs The mismatch of Polish legislation in the field of environmental protection and public procurement Problems with the notification of state aid Problems with the complementarity of investment in road infrastructure and lack of correlation in the preparation of major transport projects, the preparation of the investment process and managing property, management and monitoring of projects Delays in many projects, which lie in the lengthy procedures - long waiting for obtaining necessary decisions and time-consuming appeals system (“Team for simplification of the EU funds implementation system”). Ministry of Regional Development

Ministry of Regional Development CHALLENGES OF NSRF IMPLEMENTATION Complementarity of EU funds to national funds Further mitigation of the results of present economic slowdown Fundamental changes in the implementation system of operational programmes as a result of entering into force of the Act on Public Finances The introduction of modern management standards in the Structural Funds implementation process (programming, monitoring and evaluation) in development policy The use of conclusions and recommendations from the evaluation Ministry of Regional Development

Ministry of Regional Development EUROPEAN ECONOMIC RECOVERY PLAN - IMPLEMENTATION OF ACTIONS FINANCING AND SIMPLIFYING THE IMPLEMENTATION MECHANISMS More easy access to advances (more easy access: the ability to grant advances to all the beneficiaries, modification of the form of a security). Improved grant competitions system and more flexible assessing procedures. Increased allocation in the grant competitions that have already started. The new possibility of signing co-financing contracts even if the applicant has not yet completed all the procedures necessary to start the project. The possibility of signing agreements prior to confirmation of EC co-financing and the certification of expenditures. The possibility of transfer funds for the ROPs realization to local authorities the funds in the tranches Accelerated public procurement procedure Ministry of Regional Development

Ministry of Regional Development CONCLUSION Evaluation studies indicate that: The biggest impact of the Cohesion Policy will be felt after 2012 (as a consequence of: the size of resources, cumulative effects of the implementation and supply-side effects) In the period 2009-2012 funds’ contribution to Poland’s catching up with the EU could reach 30%. Likely rebound in investment activity in the beginning of the next decade The largest positive effects on the labour market should be expected in 2015 Increasingly higher share of services in GDP, with declining share of agriculture and industry Continued external convergence of Poland (reduction in the gap between Polish regions and the EU-27 average) is expected; however, it will be observed mainly in the case of large urban agglomerations. In 2012 the poorest voivodeships (lubelskie and podkarpackie) will reach GDP per capita level of 44% of the EU-27 average, while the richest one (mazowieckie) – 102%. Ministry of Regional Development

Ministry of Regional Development FUTURE OF COHESION POLICY AFTER 2013 BETTER SYNERGIES FOR BETTER RESULTS Cohesion Policy post-2013 - a place-based, results-oriented policy for all regions, aimed at major development challenges Effective coordination between all EU interventions which have territorial impact, in terms of: strategic concentration implementation instruments Reform of Cohesion Policy implementation system: a shift in competences between EU and national level proportionality and subsidiarity principle from compliance audit to efficiency audit stable and coherent regulatory framework Formal meetings of ministers responsible for Cohesion Policy Tzw. nowe wyzwania oraz negatywne konsekwencje kryzysu finansowo-ekonomicznego dotykają wszystkich mieszkańców Unii i określają perspektywy wzrostu wszystkich regionów. Polityka spójności ze względu na zasadę partnerstwa i na jej wyjątkowy system zarządzania umożliwia rozprzestrzenienie korzyści z integracji europejskiej i wspólnego rynku na jego wszystkich poziomach, od lokalnego po unijny. Dlatego ma ona ważną rolę do odegrania w realizacji nowej strategii rozwojowej Unii Europejskiej – „EU2020”. Przygotowywanie następczyni Strategii Lizbońskiej w najbliższej przyszłości umożliwia ukierunkowanie polityk unijnych na nowe cele i ich ścisłe powiązanie zanim rozpoczną się negocjacje nowego budżetu unijnego. Dlatego podczas przygotowania następnego pokolenia strategii rozwojowych UE, należy pamiętać nie tylko o koordynacji celów poszczególnych polityk na poziomie dokumentów strategicznych, ale również o zapewnieniu odpowiedniego systemu realizacji polityk wspólnotowych. Negatywne konsekwencji kryzysu ekonomiczno-finansowego są wciąż silnie odczuwalne przez budżety krajowe i regionalne, dlatego za słuszne uważam koncentrację ograniczonych środków publicznych na inwestycje kluczowe z punktu widzenia przyszłego rozwoju. Co więcej, tym ważniejsze staje się zapewnienie skuteczności tych interwencji, ich efektywności oraz ograniczenie generowanych przez nie obciążeń administracyjnych. Biorąc pod uwagę zróżnicowanie pomiędzy państwami i regionami UE pod względem potencjałów i wyzwań, należy umożliwić każdemu obszarowi unijnemu stworzenie odpowiedniego zestawu interwencji, aby mógł w pełni uczestniczyć w realizacji celów wspólnotowych. Podział kompetencji pomiędzy poszczególnymi politykami nie powinien tworzyć barier dla praktycznego zastosowanie zintegrowanego podejścia na poziomie krajowym, regionalnym czy lokalnym. Stąd postulat Polski dotyczący jak najdalej posuniętej harmonizacji przepisów dotyczących poszczególnych funduszy unijnych, również tych, które są realizowane poza polityką spójności (np. EFFROW). Z powyższych postulatów wynikają propozycje Polski w zakresie reformy systemu realizacji Polityki Spójności. Ich celem jest przestawienie punktu ciężkości z tempa absorpcji i zgodności z często niejasnymi przepisami, na aspekt skuteczności interwencji i efektywności systemu wdrażania: podział zadań pomiędzy instytucjami unijnymi i instytucjami krajowymi, szczególnie w zakresie audytu i kontroli. Komisja przede wszystkim powinna badać ex-ante zgodność krajowych systemów zarządzania i kontroli ze standardami unijnymi oraz przedstawiać rekomendacje wskazujące najbardziej efektywne praktyki. Kontrola indywidualnych operacji powinna co do zasady należeć do poziomu krajowego i jedynie w ściśle określonych, wyjątkowych wypadkach powinno dochodzić do kontroli ze strony instytucji unijnych; możliwości zastosowania w praktyce zasady proporcjonalności i adekwatnego obniżenia obciążeń administracyjnych (np. dla państw o niewielkiej alokacji, dla państw, które dowiodły odpowiednio wysoką sprawność instytucjonalną, czy w zależności od obszaru interwencji, jak dla działań skierowanych do MSP, na badania i innowacyjność czy budowę kapitału społecznego i intelektualnego). Tego typu zmiany mogą okazać się również skutecznymi mechanizmami tematycznego ukierunkowania funduszy unijnych na najbardziej pożądane z punktu widzenia Wspólnoty obszary interwencji; przejście od audytu zgodności do audytu efektywności, t.j. badanie uzyskanych efektów w relacji do nakładów, oraz poszukiwanie najskuteczniejszych, najmniej obciążających praktyk. Audyt procesu wdrażania powinien stać się źródłem rekomendacji dla poprawy jakości pracy instytucji oraz powinien stymulować proces uczenia się pomiędzy instytucjami, poprzez wskazywanie najlepszych praktyk. stworzenie stabilnych i klarownych ram regulacyjnych dla Polityki Spójności oraz innych polityk w istotny sposób wpływających na proces jej implementacji, t.j przepisów dotyczących zamówień publicznych, pomocy publicznej oraz dyrektyw środowiskowych. Obecny stan prawnej niepewności, który utrudnia i spowalnia proces wdrażania pomocy strukturalnej. Jest on efektem niespójnej wykładni interpretacyjnej ze strony różnych służb Komisji Europejskiej, rosnącej liczby dokumentów interpretacyjnych oraz braku jasności, jeżeli chodzi o kryteria oceny (a czasem nawet ich nieadekwatności) stosowanych prze unijne instytucje audytowe i kontrolne. Poprawa obecnego stanu rzeczy wymaga przeprowadzenia pogłębionej analizy oraz dyskusji w gronie państw członkowskich, Komisji Europejskiej, Parlamentu Europejskiego oraz Europejskiego Trybunału Obrachunkowego na temat optymalnego zakresu regulacji unijnych, identyfikacji źródeł nadmiernego obciążenia administracyjnego oraz barier wdrożeniowych. Warunkiem koniecznym dostosowania Polityki Spójności do obecnych i przyszłych wyzwań i do realizacji celów wspólnotowych jest przeniesienie debaty nad kwestiami o charakterze strategicznym na poziom polityczny. Podczas formalnych spotkań np. w ramach Rady ds. Ogólnych, ministrowie ds. rozwoju regionalnego mogliby dyskutować na temat skuteczności i efektywności implementacji tej polityki oraz w razie potrzeby, mogliby podejmować decyzje o ewentualnych dostosowaniach interwencji Polityki Spójności. Ministry of Regional Development

Thank you for your attention Poland Strategic Report 2009 National Strategic Reference Framework http://www.mrr.gov.pl/rozwoj_regionalny/Ewaluacja_i_analizy/Raporty_o_rozwoju/Raporty_krajowe/Strony/Raport_Strategiczny_2009_NSRO.aspx Ministry of Regional Development