Feasibility study. for the future cooperation of the CRE.ARE project partners showing a potential legal structure in the sense of an EGTC

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1 Feasibility study for the future cooperation of the CRE.ARE project partners showing a potential legal structure in the sense of an EGTC

2 CONTENTS page 1 Introductory statement to the selected approach 1 2 Legal background, possibilities and current status of EGTC 2 3 Experiences, expectations and limitations of EGTCs 5 4 Proven and potential examples for the implementation of an EGTC 7 5 Potential action plan for CREA.RE project group 9 6 References 10

3 1 Introductory statement to the selected approach The CREA.RE partnership comprises 12 local and regional public authorities from 10 different EU countries (AT, BE, DE, ES, FI, IT, PL, RO, SE, SI). As the eligibility criteria for the programme INTERREG IV C therefore are strictly dedicated to public and public equivalent bodies these partners are eligible for an EGTC, too. The CREA.RE project was motivated to better involve the creative sectors in the development of the European regions and cities. The project s mission is to exchange experience and make common efforts for a better, stronger and sustainable embedment of the cultural and creative industries in the regional policies. In the course of these activities there shall be elaborated a Feasibility Study for the future consecutive cooperation of the project partners, showing a potential legal structure in the sense of an "European Grouping of Territorial Cooperation" (EGTC). Within the feasibility study following items will be pointed out and evaluated for the potential use of the CREA.RE project group: EGTC - the legal background, possibilities and current status in Europe EGTC - experiences, expectations and limitations EGTC proven and potential examples for the implementation EGTC - potential action plan for CREA.RE project group To follow the specific task of the feasibility study a broad monitoring of existing similar projects and initiatives was monitored and evaluated. Then theses identified examples were checked for reasonable hints and complementary and synergistic work whereby the (inter)regional context of the CREA.RE project area has to be taken into consideration, too. This might cause some potential adaption regarding to basic requirement of the feasibility study, too. 1

4 2 Legal background, possibilities and current status of EGTC EGTCs were established in 2006 by the European Parliament and the Council under the Regulation (EC) No 1082/2006 with the political support of the Committee of the Regions. They enable regional and local authorities from different member states to cooperate more effectively, for example by allowing them to directly apply for and manage European funds. What is the EGTC for? The European Grouping of Territorial Cooperation (EGTC) is a new Community legal instrument with an own legal personality at the service of public entities willing to develop projects and activities of common interest in the field of territorial cooperation, as described in Articles 1 and 7 of the aforementioned Regulation. Territorial cooperation is to be understood as cross-border, transnational or interregional cooperation and as a tool to facilitate correspondent activities. Four main models of EGTC are possible: EGTC in order to implement (European) territorial cooperation programmes. Example: EGTC as Managing Authority and / or Joint Technical Secretariat; EGTC for implementing co-financed projects in the field of territorial cooperation under the Structural Funds (ERDF, ESF, Cohesion Fund). Example: European Territorial Cooperation projects (cross-border: e.g. Czech Republic- Austria / transnational: e.g. CENTRAL Europe, SEE Southeast Europe / interregional: e.g. INTERREG IV C); EGTC for the purpose of carrying out other EU-funded territorial cooperation actions; EGTC in order to implement territorial cooperation projects outside any EU funding. Territorial cooperation programmes including ETC programmes Main Models of EGTC Co-financed projects regarding territorial cooperation under Structural Funds Other EU-funded projects regarding territorial cooperation Territorial cooperation projects outside any EU funding 2

5 Who can set up an EGTC? EGTCs must include partners from at least two EU member states, including regional or local authorities, central governments, bodies governed by public law and associations of public entities. Participation of private entities is excluded as such. However, entities fulfilling the criteria listed in Article 1(9) of Directive 2004/18/EC can be considered as bodies governed by public law and are therefore eligible for participation in an EGTC. If different private partners are requested for any kind of an (European) territorial cooperation the EEIG 1 European Economic Interest Grouping could be aimed at. A quite successful example for that legal form is for instance SANICADEMIA which was found out of an INTERREG III A project to improve the professional development of health care system in the cooperation area of Carinthia, Friuli-Venezia Giulia and Veneto. A taste of what an EGTC can do Managing cross-border, transnational or interregional sustainable development projects (innovation and technology, environmental protection, etc.) Strengthening economic and social cohesion across borders in general Running special tasks as e.g. transport or health services Role of the Committee of the Regions Assessing the progress of EGTCs and facilitating exchange of good practice through an expert group Consultative role in the area of cross-border, transnational or interregional cooperation Collecting information on EGTC statutes and conventions Political support for EGTCs and their activities 1 see: excursus page 11 3

6 EGTCs in place in Europe February 2012 by CESCI Remarks for the CREA.RE project group Identifying links and interfaces to existing and planned EGTCs Screening for comparable projects and initiatives in Europe Evaluating potential docking points to both 4

7 3 Experiences, expectations and limitations of EGTCs As the establishment of an EGTC can be a long process requiring long-term involvement and commitment on the part of the partners as well as financial investment, such investments should be proportionate to the expected result a cost-benefit analysis should be organised. Early on in the development stage the prospective members should consider the sustainability of the EGTC. Particularly in the case of programme management the timing factor is essential, as the setting-up process of an EGTC might take some time. In general, the setting up of an EGTC might be easier where a long tradition of trust and cooperation is already in place based on a formal structure (e.g. Euroregion / Euregio) than in regions with little history of cooperation and no strong structures in place. It is also highly recommended to state a clear mission and objective of the EGTC right at the very beginning. Prospective members should not hesitate to obtain legal advice concerning their national legislations and their compatibility with the establishment of an EGTC. Some further arguments are as follows: Compared to cooperation structures that have no legal personality, an EGTC can act as an autonomous body, having its own budget, hiring its own staff and contracting independently. Beyond European Territorial Cooperation, the EGTC may be used for a diverse spectrum of cooperation missions: management of other EU programmes, EU projects and other cooperation outside EU funding. However, Member States may limit the tasks that EGTCs may carry out without a Community financial contribution. Third countries can be involved in an EGTC if their legislation and agreements between Member States and the concerned third country allow it, and if the concerned Member States do not exclude this possibility. The EGTC can act on behalf of its members, and also it is possible for one member to implement tasks of the EGTC on behalf of the whole partnership. The EGTC does not create an additional administrative level and its members do not transfer any competences to the EGTC, but entrust it with the implementation of specific operational missions and tasks. 5

8 The EGTC aims at abolishing a discriminatory aspect within the European Union s single market which made it more difficult to cooperate with a partner from another country than one from one s own Member State. The EGTC does not remove all existing legal formats of cooperation but appears as a new optional alternative. Other existing formats should be considered if they are more appropriate for the type of cooperation envisaged (see: e.g. EEIG, page 11). The limited number of compulsory organs allows flexibility for the EGTC members. Small EGTCs can then have a lean structure, while larger EGTCs may add more organs. The EGTC provides an official 'label' recognised by the European Commission and within the European Union in general. It gives more visibility to cooperation. The EGTC will probably provoke some distrust, mainly due to the fact that the EGTC system contains some legal loopholes. It is expected that this lack of legal safety will limit recourse to the EGTC. In several of its articles the Regulation refers to national legislations, which means that different legal consequences may apply in different countries. The EGTC s prospective members may have difficulty finding any 'common ground' where all applicable national provisions are compatible. Delays can occur due to the fact that the deadlines for authorising participation in an EGTC lack precision. Remarks for the CREA.RE project group Assessing the value of an EGTC comparing to other legal forms and / or concerted strategies with the project group Evaluating the current status in each partner region and the defining a common way of harmonising them step by step Considering a modular development to an EGTC whereby each stage should have clear objectives and defined stakeholders and target groups to get involved 6

9 4 Proven and potential examples for the implementation of an EGTC Although a wide range of public authorities are considering the establishment of an EGTC, the current situation in which few Member States have established the necessary provisions to ensure effective application of the Regulation has lead to a wait-and-see trend in most areas. It is likely that the first EGTCs will act as 'motors' for the development of further initiatives, and the numerous problems anticipated might not occur at all in reality or be resolved by means of pragmatic solutions and experimentation. Financial incentives and / or legal advice could help to attract and support these first pioneers. From the EGTCs in preparation respectively in process or even already implemented, of which a few selected cases are presented hereafter, the following characteristics emerge: Most of the EGTCs in preparation have a cross-border cooperation dimension. There are different types of partnerships involved (large/small, multi-level, etc). There are different EGTC models envisaged: European Territorial Cooperation programme management (Greater Region, Europe) European Territorial Cooperation project management (Galicia-Northern Portugal) Large infrastructure/public services projects without EU funding (Cerdanya Hospital). Several EGTCs have a multi-functional approach (Region Tyrol - South-Tyrol - Trentino). Some EGTCs are well advanced, and the conventions and statutes have already been drafted while in others the reflection process has just started, including e.g. the organisation of (pre)-feasibility studies, like in some German border regions. Several of the EGTCs in preparation are based on existing cooperation (either legally structured or not). Conclusions In principle, an EGTC must not engage in commercial profit-oriented activities, such as e.g. building and running a cross-border golf course25. It is, however, acceptable to join seven golf courses in different Member States in one cooperation platform and market their existing infrastructure ('7 Days of Golf 7 Courses'). 7

10 Services of general interest must also be considered differently, if the activity to be implemented by the EGTC is a competence of all EGTC members, e.g. managing public equipment for the implementation of a service of general interest (transport, health, education, etc.). Such activity is not purely commercial but implies a payment by the endusers for the services provided by the EGTC (and often the price does not cover the real costs of the services but only part of them the rest would be covered by the members of the EGTC). Having said that, all theoretical questions currently arising might be resolved very easily in practice or indeed not occur at all! Pragmatism and flexibility will be needed, as well as a strong commitment on the part of the potential EGTC partners. Any obstacles can be overcome as long as there is a strong and joint desire to do so after all, that is what territorial cooperation is all about. Remarks for the CREA.RE project group Filtering out an appropriate solution which kind of an EGTC will fit for the efforts of the CREA.RE project group One joint system, i.e. 1 common EGTC to be elaborated and established A mixed system with different legal bodies where also current legal units could be used to perform, assist and foster the CREA.RE objectives Developing long-term planning before deciding upon the legal form and structure Elaborating different development scenarios for strategic and operative follow-ups 8

11 5 Potential action plan for CREA.RE project group The development path to establish an EGTC is clearly defined by different papers of CoR Committee of Regions and by a handbook of INTERACT, an expert-driven European Territorial Cooperation programme. The EGTC offers the possibility of involving different institutional levels in a single cooperative structure, and thus opens up the prospect of new forms of multilevel governance, enabling European regional and local authorities to become driving forces in drawing up and implementing EU policy, helping to make European governance more open, participatory, democratic, accountable and transparent. Furthermore it can be a tool to implement the Europe 2020 Strategy, boosting competitiveness and sustainability in Europe's regions. Remarks for the CREA.RE project group: Structure follows planning and process Considering each single step to gain usable results immediately and in strategic view Identifying at least one regional promoter for each participating region Elaborating the procedure and rules as well as roles and functions during the development path Setting of an modular planning in an regional, cross-border transnational and interregional manner Overlapping the planning process for a joint master plan and a common roadmap in a long-term view Defining the integration and involvement of similar, complementary and synergistic projects and initiatives Testing of the cooperation form and designing quality checks and evaluation criteria Deciding about the final legal system and structure and establishing the elaborated EGTC step by step with an accompanying continuous improving process 9

12 6 References EXCURSUS: European Economic Interest Grouping (EEIG) Sources 10

13 EXCURSUS: European Economic Interest Grouping (EEIG) An EEIG is a type of legal entity created on 25 July 1985 under European Community (EC) Council Regulation 2137/85. It is designed to make it easier for companies in different countries to do business together or to form consortia to take part in EU programmes. An EEIG can be formed by companies, firms and other legal entities governed by public or private law which have been formed in accordance with the law of a Member State and which have their registered office in the European Union (EU). It can also be formed by individuals carrying on an industrial, commercial, craft or agricultural activity or providing professional or other services in the EU. The purpose of the grouping is to facilitate or develop the economic activities of its members by a pooling of resources, activities or skills. This will produce better results than the members acting alone. Its activities must be related to the economic activities of its members, but cannot replace them. Its activities must be ancillary to those of its members. It is not intended that the grouping should make profits for itself. If it does make any profits, they will be apportioned among the members and taxed accordingly. Thus, although it is liable for VAT and employees social insurance, it is not liable to corporation tax. It has unlimited liability. An EEIG must have at least two members from different Member States. An EEIG cannot employ more than 500 persons. Several thousand EEIGs now exist, active in fields as varied as agricultural marketing, legal advice, research and development, osteopathy, motorcycle preservation and cat-breeding. One of the more famous EEIGs is the Franco-German television channel ARTE. 11

14 Sources The following sources were used by preparing this document. All these web links comprise a very comprehensive information and elaborated knowledge about EGTCs %20an%20EGTC.pdf _en.htm Practical_Handbook_on_the_EGTC N ovember_2008.pdf The_EGTC_and_EGTC_Roadmap_by_INTERACT October_2011.pdf Report_on_the_application_of_the_ EGTC pdf The_EGTC.pdf _EGTC,_October_2010.pdf EGTC INTERACT pdf

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