Position Paper Hungary

Position of the Commission Services on the development of the Partnership Agreement

and Programmes in Hungary for the period 2014-2020

Launch Event 9th November 2012, Budapest

Why a position paper?

• Pro-active approach: early stage information on Commission's services position on priorities 2014-20 to Member States

• Closer alignment with EU2020 strategy and Country Specific Recommendations (National Reform Programme)

• Commission's view on development needs, challenges and priorities

• Framework for dialogue between Commission services and Member States

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THE COMMON STRATEGIC FRAMEWORK ERDF, ESF, CF, EAFRD, EMFF

THE PARTNERSHIP AGREEMENTERDF, ESF, CF, EAFRD, EMFF

National or regional level

Operational Programmes for ERDF

Rural development programmes

(EAFRD)Operational

Programmes for ESF

Operational Programmes for CF

EU level

National level

Multifund Operational Programmes for ERDF,

ESF, CF

Operational Programmes for

EMFF

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Socio-economic situation in Hungary

• Slow growth and contracting internal demand, fragile fiscal situation

• Expected only growth-driver: net export, but insufficient integration of Hungarian SMEs in global economy

• Low employment rate, high level of low skilled people and high inactivity rate

• Important regional disparities, rural urban divide, marginalised population

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Socio-economic situation in Hungary (cont.)

• Low R&D spending and insufficient innovation• Low productivity and added value (processing) in

the agricultural sector; structural disadvantages• Poor performance of transport systems• Vulnerability to climate change (flood&droughts)• Fragmentation and degradation of natural

habitats

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Europe 2020 Headline targets for Hungary

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Europe 2020 headline targetsCurrent situation in

HungaryNational 2020 target in the

NRP

3% expenditure on R&D (in % of GDP) 1.16% (2010) 1.8 %

20% greenhouse gas (GHG) emissions reduction compared to 1990 (both ETS and non-ETS)

-26 % (2020 non-ETS projections compared to

2005)-14 % (2010 non-ETS

emissions compared to 2005)

+10 % (national binding target for non-ETS sectors compared

to 2005)

20% renewable energy (in overall energy consumption) including 10% use of renewables in transport

8.68 % (2010)

4.7% (2010)

14.65 %

10%

20% increase in energy efficiency (%)/368 Mtoe Reduction of primary energy consumption

24 Mtoe(total primary energy

consumption)

2.96 Mtoe saving

(=24.89 Mtoe total consumption in 2020)

75% employment rate (population aged 20-64) 60.7 % (2011) 75 %Share of early school-leavers max. 10% 11.2 % (2011) 10 %

Tertiary education 40% among population aged 30-34 28.1 % (2011) 30.3 %

Reduction of the population at risk of poverty or social exclusion by 25%, lifting 20 million people out of poverty.

-160 000 (2010)Index 2008

450 000

Challenges for Hungary

• Weak enterprise competitiveness; insufficient R&D and limited access to finance

• Incompleteness and insufficient operation of infrastructure

• Low employment level and weak social cohesion; low quality of public services

• Inefficient use of natural resources

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Funding priorities1. Enhancing business innovation, competitiveness and the

effectiveness of R&D

2. Sustainable and interconnected infrastructure and their efficient use

3. Increasing the level of employment through economic development, employment, education and social inclusion policies, taking account of territorial disparities

4. Environment-friendly and efficient use of resources; climate change resilience

No ranking, complementarity and mutual reinforcement

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Enhancing business innovation, competitiveness and the effectiveness of R&D - SMEs

• Innovation and internationalisation of enterprises, esp. SMEs Cooperation: research, higher education, innovators Embedding multi-nationals into local research and economic

network Integration of Hungarian entreprises to global value chain Tailor-made financial instruments; targeted schemes Development of ICT products, services and use (including in

rural areas)

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Funding priority 1 Competitiveness

Enhancing business innovation, competitiveness and the effectiveness of R&D (cont.) – research, growth poles• Investments in research and R&D centres of excellence;

transfer of R&D results towards SMEs complete Extreme Light Infrastructure (ELI) project Specific strategy for environmental and agricultural sectors

(promote bio-economy, eco-innovation,etc.) • Multipolar development through regional growth poles and

innovative clusters Smart specialisation strategies Balanced multipolar development (poles: university cities) Integrated Territorial Invesments (ITI)

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Funding priority 1 Competitiveness

Enhancing business innovation, competitiveness and the effectiveness of R&D (cont.) – agriculture, rural economy

• Increasing SME contribution to the rural economy, and enhancing the competitiveness of the agricultural sector

Innovative approaches for the agricultural sector and rural areas

Adding value locally through processing and quality development

Structural changes

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Funding priority 1 Competitiveness

Sustainable and interconnected infrastructure and their efficient use – energy, water, waste

• Energy infrastructure enhanced cross-border capacities smart grids to support energy efficiency improvements• Drinking water quality improvement; monitoring• Waste water infrastructure completion and interconnection • Waste management (including in agriculture) investments to re-

use, recycle and recover

Complementary measures, actions to eliminate bottlenecks

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Funding priority 2 Infrastructure

Sustainable and interconnected infrastructure and their efficient use (cont.) - transport

•Improving integration, sustainability and cost-efficiency of urban, regional, national and transnational mobility systemsComplete TEN-T corridors, including signalling and control systemsFocus on railways and public transport modernisationImprove navigability on the Danube and the River Information SystemsE-toll, congestion charges and network rationalisation

Complementary measures, identify and eliminate bottlenecks

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Funding priority 2 Infrastructure

Increasing the level of employment through economic development and employment policies, …• Increasing the capacity of public employment

services, strengthening active labour market policies Active and preventive labour market measures to be put

in place Enhance the efficiency and the capacity of the Public

Employment Services (PES) Facilitate geographical and professional mobility Promote lifelong learning participation Support self-employment, entrepreneurship and

business creation activities Possibility for Community–led Local Development

instruments Support non agricultural SMEs in rural areas 14

Funding priority 3Employment (1)

… through the integration of the vulnerable groups using a holistic approach (employment, education, housing, health, access to services),

Improve the activity rate of vulnerable groups, the situation of marginalised groups by implementing the Social Inclusion Strategy

Promote social economy, new business models and innovative solutions for social enterprises

Increase accessibility to health care and social services Continue the de-institutionalisation process

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Funding priority 3Employment (2)

… through improving the quality of education and ensuring equal access thereto, in particular in pre-school (including childcare) facilities and higher education,

Improve the links between education and labour market Prevent early school leaving Ensure access to early childhood education Maintain tertiary education participation

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Funding priority 3Employment (3)

… as well as improving services to citizens and businesses through an efficient and financially sustainable public administration

Reduce administrative burdens

Continue the reform of the public administration• Introducing e-government and one-step government

windows• Supporting the allocation of adequate human

resources for the most sensitive areas Improve the judiciary system

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Funding priority 3Employment (4)

Environment-friendly and efficient use of resources; climate change resilience

• Integrated development and management of Hungarian rivers and water resources

Risk management (plans and monitoring) Flood management including the restoration of

floodplains and wetlands Improving the efficiency of water use Preserving natural environmental values

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Funding priority 4Resource-efficiency

Environment-friendly and efficient use of resources; climate change resilience

• Improving energy efficiency and enhancing renewable energy production and use

In constructions, buildings and housing Sustainable renewable energy supply: wind, bio-energy,

solar and geothermal energy Energy and environmental awareness Innovative energy technologies and projects in

agriculture and forestry

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Funding priority 4Resource-efficiency

Environment-friendly and efficient use of resources; climate change resilience (cont.)

• Protecting the environment, ecosystem and landscape, preserving biodiversity

Management and restoration of Natura 2000 and high nature value areas

Soil protection Targeted afforestation Sustainable farming practices/organic farming Development of ecosystem-based approaches

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Funding priority 4Resource-efficiency

European Territorial Cooperation• Transnational and cross-border dimensions, including the

framework of the EU Strategy for the Danube Region notably in:

R&D&I Low-carbon economy TEN-T networks Water and flood management, risk prevention Employment, education and inclusion

Incorporating the EUSDR objectives in all programmes

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Territorial development

• Simplification of current programming architecture reduced number of programmes balance of sectorial and territorial dimensions

• Integrated Territorial Investments (ITI) Require appropriate planning, governance and management:

most suitable at NUTS-3 levels (counties) and for major cities

• LEADER and Community Led Local Development convenient for local initiatives e.g. micro-regions

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Success factorsSome ex-ante conditionalities

•Comprehensive multimodal transport plan•National research and innovation strategy•Active labour market policy (modernise labour market institutions)•Strategies to reduce early school-leaving; to improve tertiary education attainment, quality and efficiency•Strategy for poverty reduction and Roma inclusion•Implementation of EU acquis in wastewater and waste management•Strategic policy framework to reinforce administrative efficiency

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Succesful

delivery

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Funds and instruments: synergies and coordinationFunds and instruments: synergies and coordination

Approach : Strategic, integrated and coherentApproach : Strategic,

integrated and coherent

Partnership, non-discrimination,

sustainable development

Public procurement, fraud prevention, audit

• Public procurement is the single most important domain to ensure sound management of the Funds.

Reinforce capacities of actors in award and control of contracts

Independence of the Department of Public Procurement Controls

Online procurement processes Implement and reinforce the anti-corruption

programme Independece and professionalism of the audit authority.

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Timeline

2014

First semester 2013

Agreement on

MFF and adoption of

new legislative package

Adoption of Partnership agreement

and programmes

Dec.2011

Position paper and

launch event

Oct.2011

Proposals for

CohesionPolicy

2014-2020

June2011

Commission proposal for

a Multiannual

FinancialFramework

Common Strategic

FrameworkCommunication

from the Commission

Oct-Nov.2012

Informal dialogue, technical meetings, draft documents

Negotiations, submission of Partnership agreement and programmes

end 2013

•Thank you for your attention!

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