Estonia's investment needs in 2014-2020 (24-05-2013)

Estonia's investment needs in

2014-2020

Commission Services' analysis

24.05.2013, Tallinn

Content:

I. Background and timetableII. Common strategic framework, Partnership Agreement and

programmesIII. Economic situation and challenges IV. European Semester 2012-Recommendations for Estonia V. Funding prioritiesVI. Succes factors

Content - Slide 2/27

Background Commission's analysis brought together in Position Paper for

negotiations of the 2014-2020 European Structural and Investment Funds

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

Framework for dialogue between Commission services and Member States

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

I. Background and timetable - Slide 3/27

ESIF - stimulating smart, sustainable and inclusive growth in order to achieve EU2020 objectives

Concentrate future EU spending on priority areas Prioritisation and orientation of results (e.g. ex-ante conditionalities) The macro-regional strategy for the Baltic area – integral part of

programming for the next period


Timetable

Informal dialogue with all Member

States


THE COMMON STRATEGIC FRAMEWORK

ERDF, ESF, CF, EAFRD, EMFF

THE PARTNERSHIP AGREEMENT

ERDF, ESF, CF, EAFRD, EMFF

National level Rural development programmes

(EAFRD)

EU level

National level

Operational Programmes for ERDF, ESF, CF

(can be 1 multifund OP)

Operational Programmes for

(EMFF)

II. Common strategic framework, Partnership Agreement and programmes - Slide 6/27

Economic situation in Estonia

III. Economic situation and challanges - Slide 7/27

Europe 2020 headline targets for EstoniaEurope 2020 headline targets Current situation in Estonia National 2020 target in the NRP

3% of EU's GDP to be invested in research and development

1.42 % of GDP in 2009, 1.63 % in 2010 (0.81 % public, 0.82 % private)

3 %

20% greenhouse gas (GHG) emissions reduction compared to 1990

+6 % non-ETS emissions (2010 compared to 2005). Based on current policies, it could reach

+12 % in 2020, compared to 2005

+11 % (nationally binding target for non-ETS

sectors compared to 2005)

20% of energy from renewables 23 % in 2009, 24 % in 2010 (Eurostat) 25 % in 2020 (RES Directive target)

20% increase in energy efficiency GIC = 6.07 Mtoe (2010) (Final Energy Consumption = 2.90 Mtoe in 2010)

Primary Energy Savings = 0.75 Mtoe(Final Energy Consumption = 2.90 in 2020)

75% of the population aged 20-64 should be employed

66.4 % in 2010, 70.1 % in 2011 76 %

Reducing early school leaving to less than 10%

13.9% in 2009, 11.6% in 2010, 10.9% in 2011

9.5 %

At least 40% of 30-34 years old completing tertiary or equivalent education

35.9 % in 2009, 40 % in 2010 40 %

Reducing the number of people at risk of poverty or exclusion by at least 20 million in

the EU (compared with 2008 levels)17.5 % in 2010, 58 000 people in 2009 15 %

III. Economic situation and challanges - Slide 8/27

Challenges for Estonia I

Insufficient participation of private sector in research and innovation and inadequate competitiveness of SMEs •1.63% of GDP on R&D (0.82% private)•Fragmented R&I system, lack of focus•Only a fraction of companies innovate•Business-academia co-operation not strong enough•Improvements in competitiveness required to foster exports

III. Economic situation and challenges - Slide 9/27

Challenges for Estonia II

Insufficient infrastructure endowment

•Missing north-south infrastructure•Inadequate quality of road and rail•Lacking intermodal connection points and integrated systems•Interoperability of transport systems and hubs•Outdated energy distribution network

III. Economic situation and chellanges - Slide 10/27

Challenges for Estonia III

Skills mismatch, high unemployment of vulnerable groups and low-skilled people, varying capacity of local governments in providing public services

•Decreasing population =>insufficient labour supply in longer term•High youth unemployment •Increasing long-term unemployment •Skills mismatch and lack of skilled labour force•Low participation rate in lifelong learning, in particular for low-skilled and older people•Low coverage of ALMP measures => low effectiveness of ALMP•Varying capacity of local governments in providing public services


Challenges for Estonia IV

High energy intensity and gaps in relation to EU environmental targets

•Low energy efficiency performance at sector level•Only 0.2% of energy in transport from RES, shift from public transport to private cars•Gaps in compliance with water and waste directives•Biodiversity and sustainable use of marine resources


European Semester 2012 recommendations for Estonia

1. Preserve a sound fiscal position by implementing budgetary plans as envisaged, ensuring achievement of the MTO by 2013 at the latest, and compliance with the expenditure benchmark. Complement the planned budget rule with more binding multi-annual expenditure rules within the medium-term budgetary framework, continue enhancing the efficiency of public spending and implementing measures to improve tax compliance.

IV. European Semester 2012 – Recommendations for Estonia - Slide 13/27


2. Improve incentives to work by streamlining the social benefits system and increasing flexibility in the allocation of disability, unemployment and parental benefits, while ensuring adequate social protection. Improve delivery of social services, while better targeting family and parental benefits and removing distortionary income tax exemptions related to children. Increase the participation of the young and the long-term unemployed in the labour market.



3. Link training and education more effectively to the needs of the labour market, and enhance cooperation between businesses and academia. Increase opportunities for low-skilled workers to improve their access to lifelong learning. Foster prioritisation and internationalisation of the research and innovation systems.



4. Improve energy efficiency, in particular in buildings and transport, and strengthen environmental incentives concerning vehicles and waste, including by considering incentives such as the taxation of vehicles. Foster renewable energy use, including through upgraded infrastructure and legislation. Continue the development of cross-border connections to end relative market isolation.



5. Enhance fiscal sustainability of municipalities while improving efficiency of local governments and ensure effective service provision, notably through stronger incentives for the merger of or increased cooperation between municipalities. Relevant reform proposals should be put in place within a reasonable timeframe.


Funding priorities

1) Strengthening private research and creating an innovation-friendly business environment

2) Upgrading infrastructure3) Skilled labour force, better education, high

employment and inclusive society4) Environment-friendly and resource-efficient economy

There is no ranking in the presentation of the funding priorities

V. Funding priorities - Slide 18/27

Strengthening private research and creating an innovation-friendly

business environment (1)

• Foster prioritisation and internationalisation of R&I systems• Develop R&I strategy for smart specialisation• Identify the knowledge-intensive sectors on which to

concentrate public resources• Optimise benefits of cooperation• Current relative level of CSF investments is proposed to be

maintained, private investment should increase


Strengthening private research and creating an innovation-friendly

business environment (2)

• Enhance private research, development and innovation activities

• Match transnational, national and regional R&I provision to business demand

• Strengthen SMEs' competitiveness and facilitate their access to finance and internationalisation, including in agriculture and fisheries


Upgrading infrastructure

• Provision of key transport and energy links reduces isolation and boosts the economy

• Current level of CSF investments in this funding area is proposed to be maintained

• Improve essential transport links, including moving ahead with the Baltic-Adriatic Corridor, a key railway project to implement the EU Strategy for Baltic Sea Region

• Develop energy distribution networks


Promoting employment and supporting labour mobility

• Access to employment for job-seekers and inactive people• Support to self-employment, entrepreneurship and business

creation• Active and healthy ageing

Enhancing access to affordable, sustainable and high-quality services, including health care and social services of general interest


Skilled labour force, better education, high employment and inclusive society (1)

Investing in education, skills and lifelong learning• Reducing early school-leaving and promoting good quality

education• Enhancing access to lifelong learning (LLL), upgrading the skills

and competences of the workforce and increasing the labour market relevance of education and training systems.

• Improving the quality, efficiency and openness of tertiary and equivalent education with a view to increasing participation and attainment levels

• Developing education and training infrastructure as regards pre-school facilities and the secondary education sector restructuring



Enhancing institutional capacity and ensuring an efficient public administration

Investment in institutional capacity and in the efficiency of public administrations and public services with a view to reforms, better regulation and good governance

• Increase the capacity of local governments to provide high-quality public services and create incentives for closer cooperation in provision of public services, in particular social and educational services.

• Strengthen the capacity to formulate policy and to make use of regulatory tools to improve the business environment through a consistent use of impact assessments, better involvement of stakeholders, administrative simplification and reduction of burden on businesses, increased use of ICT to support the regulatory reform.



• Shift to an energy efficient, low-carbon economy• Address the remaining gaps in the compliance with

the acquis and the binding EU targets in the field of environment (transport related air pollution, waste hierarchy, waste water, drinking water)

• Further environmental protection in agricultural, fisheries and maritime sectors

Environment-friendly and resource-efficient economy


Success factors

Strategic, integrated, coordinated and coherent approach Targeted actions with measurable impacts, concentration Cooperation across regions, funds & strategies

Ex-ante conditionalities, e.g.• R&I strategy for smart specialisation• National transport plan• Strategic plan for aquaculture; data collection for

fisheries management and the implementation of a Union control, inspection and enforcement system.

VI. Succes factors - Slide 26/27

•Thank you!

Estonia's investment needs in 2014-2020 (24-05-2013)

Economy & Finance

Transcript of Estonia's investment needs in 2014-2020 (24-05-2013)