Nowadays also with the new legal organization of EGTC (Euopean Grouping of Territorial Cooperation). Border regions, towns and districts promote cooperation as a tool for growth and change through policy development and strategic orientation within territorial cooperation and beyond regional development. Regional disparities in Slovakia are actually the highest among EU countries. The aim of the study is to measure the success rate of project and economic growth in the EGTC of Pons Danubii, geographically the region of Southwestern Slovakia (North-Western Hungary) mostly in the 2007-2013 programming period and focusing on prognosis and trend of the current new 2014-2020 period.
Key words: Regional Development, EU Cohesion Policy, Cross Border Cooperation, EGTC, JEL code: R110
Nowadays, the efficient development of regions is hard to imagine without utilization of opportunities from development grants or project sources. This is especially typical for settlements in cross border areas, which are located near to the state’s border and relatively far from centralized industry and community centre of a country. It is particularly necessary to use allocation resources of the Cohesion Fund in order to maximize their impact on achieving the target goals and to approach the EU‘s average, both in GDP and unemployment rate. Economic, social and territorial disparities at regional and national level have increased in the enlarged European Union. In order to strengthen economic and social cohesion the Community is aiming at reducing these disparities between the levels of development of various regions and the declining of the least favoured regions, including rural areas.
Therefore, in order to achieve these goals a frame for the actions of increase convergence, competitiveness and employment as well as cross-border, transnational and interregional co-operations throughout the European Community should be taken by laying down regulations and laws, following the trends and successful project realisations and statistics about the preferences and need of the specific regions.
Firstly, we examine the trends in CBC project then we analyse the most commonly used topics and organization forms. Later the study measures the effective priorities and tries to answer the question wheather the Integrated Terriotorial Cooperation will be better or it always remains within the frame of the law and the generally directed calls of proposals.
Finally, the perspectives and the new cross-border cooperation programmes for the current framework period (2014-2020) are briefly introduced. Special focus is on the role of the one of new organization form, on the European Grouping of Territorial Cooperation (hereafter as EGTC) and its possibilities and project opportunities.
In this study the successful applications and results of Cross Border Cooperation projects are going to be introduced, which were implemented in the Hungarian-Slovak border region in times of establishing the EGTC’s which is dated back to 2010 in the middle of the programming period. The primary aim of the Grouping is the implementation of programmes and projects in the framework territorial cooperation which will be subjects of the study partially.
Methods used: Statistical data analysis, Convergence analysis, Comparative study, Statistical survey, Observing, Qualitative Interviewing, Absorption Maps of CBC projects, Cohesion analysis of the region.
Cross Border Policy in the Cohesion Policy of EU
Europe without borders has been a slogan strengthening Europe’s cohesion now and there is also discutable if borders still exist. (Hagett, 2006) However, some publication from the beginning of millennium defined that Schengen the control is looping on importance (Dimitrovova, 2008) this can be changed in the future from 2015. However Schengen borders are not controlled strictly, the state controlling system has been replaced by central control power. Outside Europe there is a very strictly controlled state border system, also because of the terroristic attacs.The study does not analyse the happenings after 11.September 2001, neither the Migration Crisis of 2015. However, in future this fact can influence the Hungarian Slovak Cooperation. According to the research of Van Houtum the crossborder cooperation is influenced by creation of relations, networking, interactivity, transaction, success, long-term relation. Trust is also a key factor as sometimes borders mean border in mind. These borders can be caused for border inhabitants while the other part of the country seems to them far. According to Van Houtum trust is a psychological factor, not an economic, however in final output they can cause lack of cooperation, interaction and in long-term it can have impact on crossborder cooperation and economic indicators. Due to some historical events we might feel borders even stronger then ever.. On one side borders can protect and filter dangerous threats, on the other side they can positively effect economy, interaction helps to join, organize groups of people together, even if they come from different cultural background. (Leimgruber, 2005) The economic powers would like to make the borders without barriers, on the contrary political powers not (Kovács, 2010).
According to Hagett (2006) regions can be slightly different by function, type and utility:
- Homogenous cross border regions where the settlements are homogenous from at least one point of view, geografic workmarket or production. For example Tokaj vine region in Southeastern Slovakia is this kind of region.
- Knotted cross border regions where a typical peripheria – center is based and border are assymetric, for example Komárno and region as well as Győr means a centre for Dunajská Streda or Veľký Meder.
- Statistical border regions are used by projects of the European Union NUTS3 can be companies, NGOs, Local Government, Settlements, EGTCs, Euroregion, as well .(Horváth, 2007; Lengyel, 2008). The study about the Hungarina Slovak cooperation possibilities states (Mezei, 2008) that the crossborder regions often belong to the most neglected and less developed places in Europe. This can be explained partially by the long- term pressure between nations due to history and sometimes also by wars.
European Grouping of Territorial Cooperation (EGTC)
EGTCs are legal entities set up to facilitate cross-border, transnational or interregional cooperation in the European Union (hereafter EU). Euroepan Grouping of Territorial Cooperation (hereafter as EGTC) was established legally in 2006 and it is a tool to facilitate cross border cooperation. (EC CoR, 2015) The European Grouping of Territorial Cooperation (EGTC) was established the 5 July 2006 by Regulation (EC) 1082/2006 of the European Parliament and of the Council and came into force on 1 August 2006. Specifically, the EGTC is dedicated to the management and implementation of territorial cooperation programmes or projects co-financed by the Community through the European Regional Development Fund (hereafter ERDF), the European Social Fund (ESF) and the Cohesion Fund, but it can use all the other financial instruments of the EU, or it can simply implement tasks without European co-funding. They allow regional and local authorities and other public undertakings from different member countries to set up groupings with a legal status to deliver joint services. Member States have to agree to the participation of potential members in their respective countries. (EurLex, 2010)
EGTCs is Southwestern Slovakia
In the region of Southwestern Slovakia there are three active EGTS’s, from which two have Hungarian legal seat and one Slovak, namely it is Pons Danubii, subject of our deeper study in this topic. (Domonkos, 2015; CoR, 2016) The oldest EGTC in the region is Ister Granum with Tatabánya seat overwhelming in Nitriansky Region and Esztergom County. The most widely spread, Arrabona EGTC encircles two Slovak districts as Dunajská Streda and Győr-Moson-Sopron Region (Megye) with the seat of Győr Town. Looking back to CBC HU SK financed successful project list (Financed Project of CBC HU SK, 2016) there are three Pons Danubii leaded and one managed by Ister Granum EGTC. However, Arrabona reached in applications, it semms to be more cooperating then leading this kind of activities. Even if there is possible to find another EGTC in the region, the recently created RDV (Rába-Duna-Vág) will practically coordinate Grant Management and Distribution for the territory of NUTS3 Regions (Kraje) or LAU 1 District (Okres) in Southern Slovakia. According to the map repeatedly represents some of the NUT3 and LAU1 settlements of the above mentioned EGTCs, as for example Győr, Tatabánya. From functional point of view the types of the EGTC can be programme based, project based or the typical cross border EGTC.
The Pons Danubii border region is one of the first EGTCs in Slovakia, and it is the most active in the Southern region of Slovakia. (Domonkos – Pawera, 2013) Direct aim of the Grouping is the establishment of cross-border cohesion in the territory of the Grouping; implementation of projects in order to enhance joint strategic developments and improving the quality of life in the Grouping’s member settlements. (EurLex, 2015) We take into deeper loop the most projects on CHC HU SK list had from EGTCs Pons Danubii (2010) with a Slovak seat in Komárno.The Pons Danubii EGTC is the 15th EGTC officially registered in the EU. Members of the Pons Danubii EGTC are the 4 Hungarian municipalities Komárom, Tata, Kisbér, Oroszlány and three Slovak towns as Komárno, Kolárovo,Hurbanovo.Before EGTC’s activity the applicants of bilateral and crossborder projects were municipalities and settlements itself. The Pons Danubii EGTC presents a new opportunity for municipalities and regions to establish cross-border, interregional cooperation in order to reach joint goals. The aim of the Grouping is to follow a non-distinction policy: local actors must have equal opportunities on national and cross-border level as well. It is a legal entity, it has its own budget, it employs people and it can sign agreements. (PD website, About EGTC, 2015)
Absorbtion of EU Funds in Slovakia
The accessibility indicators for Centre and East Slovakia are of very low value. On the other hand, the capital city, Bratislava benefits from the well developed infrastructure and proximity of Vienna. Based on our findings, it is important to find possible solutions, proposals and measures to achieve that other regions except of Western Slovakia have sufficient knowledge and skills to prepare projects with all the necessary information. (B. Domonkos, 2015a) The EU Funds are actually one of the most important instruments to tackle the main development challenges for Slovakia and to implement the Europe 2020 strategy. Slovakia has the opportunity to show its great potential to draw EU funds successfully, and particularly in areas that are strategically important for Slovakia primarily reduce long-term unemployment and regional disparities. It is likely that the support coming from the ESF projects could improve the labour market situation in Slovakia.(Pawera-Šmehýlová, 2015) In October 2015, Slovakia had still more than 20% of the total seven year allocation to be used from the programming period 2007 – 2013.
Comparison between the absorption amounts shows big differences in Operational Programmes in Slovakia. In the most effectively absorbed operational program was Health Care, and Regional Operation Programme, after the OP CS SR ČR follows (Regional and Cross Border Cooperation between Slovakia and the Czech Republic), Ministry of Finance 2015. In this graph prepared by the Slovak Ministry of Finance there can be not found the CBC HU SK programem.This missing part of information can be explained by the seat of Joint Implementation Agency, for this programe and programme period located to Budapest. Interactive maps can confirm that the highest number of approved project is always a bigger interest in the bigger cities as Bratislava and Košice. Slovakia has not run out of 2.617 billion euros from EU funds. Out of the total amount allocated to Slovakia for the years 2007 to 2013, this represents 22%. There is fortunately the rule n + 2, which means that money from the budget by 2013 must be used up before the end of 2015. (Pawera-Smehylova, 2015) The highest spending among the 14 operational programs (further as OPs) have OP Employment and Social Inclusion (87.01%), Regional OP (85.74%), OP Healthcare (84.61%) and INTERACT II (84.39%). Followed by the OP Information Society (83.91%), OP Transport (83.07%) and OP Bratislava regional programme (81.47%). Around 70 – 80% rate achieved OP Education (79.13%), technical assistance (75.45%), and Research and development (72.87%). The lowest spending commitment for 2007 to 2013 recorded OP Environment (64.48%) and OP Competitiveness and Economic Growth (58.11%) taken from statistical sources. (Ministry of Finance, 2015). From thisoperational programs the EGTC benefits from Regional, INTERACT II and OP Social Inclusion. In the cross border territory we do not notice many ESF Support requested by EGTCs. It is likely that the support from the ESF projects could improve the labour market situation in Slovakia. The main objectives of the European Social Fund is getting people into jobs: the ESF supports organisations around the EU to put in place projects aimed at training people and helping them get work. (Pawera-Smehylova, 2015; Ministry of Finance, 2016) However, the unemployment rate is one of the highest in Southwestern Slovakia. (Slovak Statistical Office, 2015)
Role of Cohesion funds in Slovakia- European territorial cooperation
Cohesion Policy is helped by Cohesion Fund which is one of the five European Structural and Investment Funds. From 2014, these operate under a common framework and pursue complementary policy objectives. They are the main source of investment at EU level to help Member States to restore and increase growth and ensure a job rich recovery while ensuring sustainable development, in line with the Europe 2020 objectives (European Comission b, 2015).
The European Cohesion Fund (hereafter as CF) in order to achieve the overall goal of cohesion for the period of 2007-2013 has the following three objectives of Community interest have been defined with three main objectives ,namely Convergence, Regional competitiveness and employment and European territorial cooperation. (National Strategic Reference Framework, 2014) That objective of “European territorial co-operation” shall be aimed at strengthening cross-border cooperation through joint local and regional initiatives, strengthening transnational co-operation by means of actions conductive to integrated territorial development linked to the Community priorities, and strengthening interregional co-operation and exchange of experience at the appropriate territorial level. (European Comission, 2015a).
Both, in Hungary and Slovakia the most frequently absorbed funds were part of either ERDF or Cohesion Funds. In Hungary this level of absorption has been 115 % and 104 % according to the KPMG analysis. (KPMG, 2014) One can not receive very precise absorption data on the CBC HU SK projects itself as the Joint Technical Advisory of CBC HU SK Operational Programme is located outside Slovakia and the Hungarian VATI are panning to prepare the CBC HU SK statistical research in n+2 period. (Hakszer, 2015) . In total the Cohesion Fund in Slovakia is used in 85 % only.
As the analysis shows in Slovakia the ERDF was absorped almost fully, however Cohesion Policy seems to be lagging behind.
Priorities and trends of Cross Border Cooperation
Achieving the highest possible efficiency in the use of EU Funds for the development of education and employment in the Southern Slovak regions is a priority and one of the main objectives of the Commission, national governments and the regions themselves. Development of cross-border activities is defined by primarily encouraging entrepreneurship, in particular the development of SMEs, tourism, culture, and cross-border trade, improving the joint protection and management of natural and cultural resources, as well as the prevention of natural and technological risks. Finally, the goal is to reach supporting links between urban and rural areas and by establishment and development of transnational co-operation, primarily on the following priority areas as innovation, environment, accessibility, sustainable urban development. However, the trend of absorption is rather a characteristic of behavior so basically a qualitative indicator, it can be deducted by the most common topics and medially popular success stories, or sustainable development and long-term project possibility. In this chapter the study groups the approved grants into types according to the priority, topic and duration of projects and its possible future continuation. The priority of the call was focused on “Economy and society” and it is planned to aim at actually promoting cooperation initiatives contributing to an integrated development these areas. (CBC HU SK, 2015).
To the successful projects od CBC HU SK belong: “Creation of marketing tools for thermal tourism in the region of Dolný Žitný ostrov and Hanság, “Interregional Non-profit project-development network, “Interregional centre for product management”, “Establishment of a cross-border network for the recognition of common interests “, “The laboratory of the European cohesion”: generation of project cooperation in the Ister-Granum EGTC with HUSK/0801/1.5.1/0077 (also mentioned in the part about EGTCs) . Furthermore, Pons Danubii EGTC was active in the project of “Construction of cyclo paths of Komárom-Komárno-Kolárovo and its linking to the existing cycle path of project HUSK/0801/2.3.1/0163.“ Secondly, the other priority in this call and programming period was aiming to support environment, nature protection and accessibility incorporates interventions aimed at improving the physical conditions of cross-border co-operation, primarily in the fields of transport and communication, as well as interventions to improve the natural environment. Successful projects in this call are as follows: „ Cycle tracks without borders – studies and plans„ from Souther town, Energy of Future – Analysis of the potential and preparation strategy of the investments aimed at the use of RES (Renewable Energy Sources), „Cycle track Komárno–Váh- Komárom and its connection to the international cycle track“. (CBC HU SK, 2013). Objectives, priorities and projects are focused on economy and culture, the second priority where a lower number of projects was present is highly concentrated on modern technologies in the field of ecology and environmental studies and activities. Our analysis from Slovak EGTCs lead to the answer that the most popular call for proposal increased social and cultural coherence, as a basic need of Cohesion Policy of EU.
In order to analyse the effectiveness of projects it is important to see the previous and current status. Some of the projects are closed now, there are some measuring indicators dealing with project success. Analysed in the region of Southwestern Slovakia we can see that the crossborder strategy tries to enhance companies to cooperate.The two biggest topics are the infrastructure of cyclopath and the communication through webTV and mutual labor market project. Although, it seems that available performance information is incorporated fairly well, measurement and effective usage as well as sustainable development and continuity are sometimes missing in log term plans. Considering the existing social and economic relationships of Southern Slovakia the key to the social and economic renewal of the subject region are the small- and middle enterprises. (Lelkes, 2004)
Measuring effectiveness of CBC HU SK Projects
Measuring Cohesion Policy in Cross Border regions is certainly a topic that requires special attention from both academic research and the policy making community. While there is a current need for regional development policy in the EU the actual performance of the Cohesion Policy is questionable.Cohesion Policy is a political compromise rather than radical change are more likely to be observed. This can further explain why economic growth is not subject of the study in case of EGTC as this a new legal model, basically a test of the Cohesion Policy. In general we can measure the growth – economic and regional with following indicators and values. Measuring of economic growth is a complex activity is a subject of macroeconomic comparisons.
From another analysis (Földes, 2015) we observe that unemployment rate was behaving different in Hungary (growing after 2008) as in Slovakia with a very big difference from Hungarian rate, but nowadays it is competitive. With regard to the last 10 years GDP the comparison shows rapidly growing Slovak economy, but very rough differences in regions between peripheria and capital:
- Measuring of cohesion rate between regions where projects were realised
The subject of this part is the project numbers, success rate, density and appearance of legal status of applicants and comparison with other Operational programmes.
- Measuring with success ratio of project (number of requested and approved projects divided, in percentages)
- Mapping the situation of other Operation Programs in general and from the total budget allowed in Slovakia assessing the CBC HU SK
As above analyzed there were three approved from the six total reached in projects, in the amount of almost 3 millions of EUR absorbed where the majority was focused on the infrastructure development directly (Cyclopath) or indirectly (workmarket). The list of projects with the amount approved is as follows: Crossing Borders by Information in the Pons Danubii Border Region in the amount of 270 980 €, the second in chronological order was entitled as Supporting cross-border cooperation of labour markets by the improvement of labour market networks and trainings 201 360 € which was enhancing the labour market effecitivity and workshops and the latest but in amounts highest was the Construction of cyclopaths of Komárom-Komárno-Kolárovo and its linking to the existing cycle path of project HUSK/0801/2.3.1/0163 in the amount of 2 470 787 €. In numbers, 124 project of CBC HU SK were approved in the Nitra and Trnava region, from which 62 were applied from Hungary and 62 organisations had Slovak legal seat. (Domonkos, 2015)
Statistically, it appears that already 4 times EGTCs were lead partners, 5 times Regional Development Agencies, 13 Unions or some Grouping of Towns or Institutions, 26 public intitutions (school, libraries) and 41 settlements (town, village, local governments, local administrative units) and last but not at least 35 nonprofit organizations (NGOs).Alltogether, there is a tendency to request in the legal form os as NUTS3 as town or village or local government. The ETGC starts the activity in the next period and will have most significant numbers in applications. The support under CBC Programme Hungary – Slovak Republic 2014 – 2020 will be directed towards the protection and improvement of the environment, building transport infrastructure, strengthening of cross-border mobility, use of the river for freight and passenger transport and the construction of modern transport network of border regions. (SKHU.EU, 2016a) This a topic requires further attention towards the cross border cooperation. There is growing need of regional development, creation of jobs, workmarket, information across borders and infrastructure. However, Košice and Bratislava as big cities agglomeration (marked as red) are absorbing in general a lot of funds, also because of the seats of many organization is centralised here. The graph about the Operation Programs shows a big interest for INTERACT and Environment as well as the Regional Operation Programme.
According to the analysis of Hakszer 2015 we can see the dependence of the size of the town or city, which is indicated by red color of Bratislava and Kosice, The number of project is surprisingly very high in this areas, however according to the public awareness whereas those towns where the Cohesion Policy rule of convergency criteria of GDP< 75 % is already fulfilled (European Comission, 2013a). In comparison to the number of project we can find that in general more amount of Money for one citizen in southern border regions. (Pawera, R.-Šmehýlová, Z.; 2015) In accordance with the new design of the European Cohesion Policy of 2014-2020 and the targets set in Europe 2020, the programs has significantly been reshaped to achieve greater impact and an even more effective use of the investments. ERDF Regulation contributing to the delivery of the Europe 2020 strategy for smart, sustainable and inclusive growth (European Comission, 2015d) states the Territorial Strategy. At least, 80% of the budget for each cooperation programme has to concentrate on a maximum of four thematic objectives among the eleven EU priorities. Some of the goals can be very ineffectively absorbed by EU funds, as we see the Baltic countries are using the Cohesion Policy the less as they are not the member countries of EU, the Cohesion Fund legally allowed the European basic 15 countries are using it in 25 % and the Visegrad 4 together with Slovakia, Romania and Bulgaria, the ex-socialist countries are also benefiting from it.
Every country is economically and regionally diverse and unique in Central Europe, also the employment rate differs in every country, and absorption rate is usually higher in those which are less developed. (Hungarian Government Office, .GOV.hu, 2015) Slovakia is somewhere in the middle of V4 absorption rates according to the graph by the average. However, Hungary shows above average numbers, it doesnot significantly mean more effective projects and developped cross border cooperation. Generally, the impact of V4 to cross border territory might be the hihgest in V4, as geographically those regions are the furthest located from the capitals as Bratislava, Budapest (Hagett, 2008). In order to assume the goals of the new programming periods we can pick out the stronger focus on results by clearer and easily measurable targets for better accountability, simplification.Cohesion Fund is one set of rules for five Funds, introduction of specific preconditions before funds can be channeled. Finally, it is strengthening urban dimension and fight for social inclusion a minimum amount of ERDF marked for integrated projects in cities and of ESF to support marginalised communities. The European Commission may suspend funding for a Member State which does not comply with EU economic rules. The important reforms of cohesion Policy of EU is the concentration of sources of future funds and a limited amount of priorities with very precise and clear outputs. From the point of view of the EU it is very aimful to use out the Strategic Famework of EU for the support of this fields such as environmental innovation, infrastructure for economic growth, development of human capital, sustainable and effective usage of nature sources, modern and professional public administration. (Domonkos, L.-Pawera, R., 2013)
By the topic of EU funds it always remains a disputable question how about the corruption and transparency.A survey made in 2015 in Pons Danubii Region shows (Bott Domonkos, L, 2016a) that people are rather negative in attitudes in general in EU funds, as well as in the Cross Border Cooperation. It might be a rivalisation according to the survey which was taken beyond 200 respondents and their opinions were based mostly on objective findings and feelings. The majority of the questioned persons were Slovak inhabitants speaking Hungarian or with Hungarians from Hungary. All of them were concerned that the other part of the border region is taking into consideration more, they benefit more effective from this CBC HU SK projects. (B.Domonkos, 2016)
In order the EU funds can then serve for social, economic growth, it is inevitable to absorb them in a transparent way. In general there would be recommended to make higher impact on the structural funds’ definition, precise rules and the character between information and conflict of interest or general controlling in principles of partnership. Transparent system means not only lower possibility of corruption in lower amount of the possible cheating or complex and administrative system of managing and closing of EU projects. (Vlach et al, 2005)
In search for efficiency, effectiveness and fiscal sustainability of cross border territory projects, NUTS 3 regions gather more performance information on fundings than ever before. As many of them have tough to incorporate and use this kind of information in budgeting of local government and planning documents of Strategy and Plan of Economic and Social Growth planned always continuously and simultaneously with EU programming documents. The study showed a high number of projects in the Southwestern Slovakia, mainly in the most active microregion of Pons Danubii. Also, the main goal of this article was to discover how regions, local government and municipalities together with EGTCs and subjects of cross border cooperation can raise performance, show best practices, which later can be mapped by current sources of trends and approved projects.
In order to analyse the effectivenes of projects it is important to see the previous and current status, also analyse the economic indicators long-term. Some of the projects are closed now, there are some measuring indicators dealing with project success which will be visible only in couple of years. One by one analyzing projects in the region of Southwestern Slovakia the crossborder strategy also enhances companies to cooperate. The numbers of projects and amount of approved are high. It can be concluded that measuring the effectiveness of economic indicators is one way of objective evaluation. However, budgeting in this period of 2014-2020 for regions and EGTCs offers interesting insights in the way this kind of distribution of allocation is practiced in EU funds can locate and achieve in cross border regions. Hungary in North and Slovakia in South is a very different as it was showed in cohesion policy rate, priorities and stages of development.
The Euroregions have the objectives of the national cross-border organizations significant overlap with their nature of European Territory Efficiency program goals, so that individual cross-border programs can resource operating capacity improvement, establish the operational and systematic, sustainable activities, cooperation with other partners and long duration projects. The cross-border programs with respect to the creation of synergy or strengthening of a tangible result are places of development. They should show a best practice for center regions as Bratislava and Budapest, that peripheria can also be successful. Regional development, project evaluation activities along with the objectives and activities, priorities and programs of CBC HU SK could be more effective in the next or current period. There is a future expectation that Hungarian-Slovak Border Strategy will be reducing isolation and expanding synergy through improved access to transport, information and communication networks and service by cyclopath and other infrastructural road enhances cooperation of various offices, public institution. By developing collaboration, capacity and joint use of infrastructures of a common cycling road and common ways of communication channels, in particular in sectors such as traffic, events, health, culture, tourism and education.
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