Ex Post Evaluation of Objective 1 1994-1999 National ...€¦ · Ex post evaluation of Objective 1 1994-1999: National Report - France 3 REVERDY ASSOCIES 28/02/2003 10.2. Extent to

European CommissionECOTEC

Ex Post Evaluation of Objective 11994-1999 National Report- France

28 FEBRUARY 2003

ECOTECEx post evaluation of Objective 1 1994-1999: National Report - France 2

REVERDY ASSOCIES 28/02/2003

Table of contents

1. EXECUTIVE SUMMARY p.42. INTRODUCTION p.123. METHODOLOGY p.144. APPROPRIATENESS OF STRATEGIES ADOPTED AND PURSUED 1994-99 p.15

4.1. Key issues in 1994 and their evolution up until 1999 p.154.2. Strategies adopted in the Single Programming Documents p.234.3. Assessment of geographical spread p.314.4. Views of the ex ante and mid-term evaluators on appropriateness p.31

of the SPDs4.5. Conclusions on appropriateness p.33

5. EFFECTIVENESS p.385.1. Programme outputs and results p.385.2. Programme effects p.465.3. Assessment of Community Added Value p.675.4. Changes to policy and practice p.765.5. Conclusions on effectiveness p.78

6. EFFICIENCY ANALYSIS p.806.1. Description of projects p.806.2. Calculation of overall unit costs p.826.3. Conclusions on efficiency p.82

7. IMPACT p.847.1. Evolution of context from 1994 onwards p.847.2. Contribution of SPDs to the achievement of targets p.857.3. Impact on employment p.867.4. Conclusions on impact p.88

8. MANAGEMENT AND IMPLEMENTATION SYSTEMS p.918.1. Institutional arrangements p.918.2. Project selection process p.958.3. Financial system p.968.4. Monitoring structures p.978.5. Programme evaluation p.978.6. Synergy effects p.978.7. Equal opportunities and the environment p.978.8. Conclusions on management and implementation systems p.98

9. STRENGTHS AND WEAKNESSES, 1994-1999 p.999.1. Process issues p.999.2. Achievements p.1009.3. Overall efficiency p.101

10. CONCLUSIONS p.102

10.1. Conclusions on the 1994-1999 period p.102



10.2. Extent to which strengths and weaknesses have been taken into account for the 2000-2006 programming p.102

11. RECOMMENDATIONS p.105

ANNEX 1 – LITTERATURE REVIEW p.108

ANNEX 2 – LIST OF CONTACTS AND INTERVIEWS p.110

ANNEX 3 – EFFICIENCY CASE STUDIES p.113

ANNEX 4 – EXTRACTS FROM THE REGIONAL CASE STUDIES p.127



Ex post evaluation of Objective 1 1994-1999: National Report - France

1. EXECUTIVE SUMMARY1.1. SummaryGeneral introduction

This French national report examines the Objective 1 programmes in France over the periodgoing from 1994 to 1999. It was carried out for the DG REGIO within the larger frameworkof the EU wide ex post evaluation of Objective 1 programmes. The structures of the workprogramme and of the report follow a common guide agreed for the project.

The evaluation deals with five aspects of the investment programme : "appropriateness" of thestrategy; "effectiveness" with which objectives were delivered; "efficiency" with whichprogrammes operated; "impact" of programmes; "management and administration" issues.

Between 1994 and 1999, six French regions were eligible for the Objective 1 programme :- in continental France : Corsica and the French Hainaut (in Nord Pas-de-Calais region),- the overseas departments (DOMs1) of Réunion, Guadeloupe, Guyane, and Martinique.

These regions (except for the French Hainaut) suffered at different stages from theirgeographic distance from the large European markets, and from the narrowness of their localmarkets. The main challenge for the period 1994-1999 was to reduce their isolation, and at thesame time to encourage the endogenous potential of development. These challenges impliedlarge investments in basic infrastructures (to reduce the consequences of distance), and asustained effort towards developing tourism, agricultural resources, fisheries and the localSMEs, whilst still trying to preserving the environment. Improving education and vocationaltraining was another priority, not only to promote economic development, but also toovercome the main reasons of exclusion of the job market, and to promote social cohesion.

In France, the coverage of the investigation for this evaluation was uneven : all the mainSingle Programming Documents (SPDs) were examined in terms of appropriateness, while asubset was examined under the other headings. The work programme involved a combinationof analysis for each of the selected SPDs, consultations with key informants, and a review ofprevious evaluations and other relevant literature.

Overview of the regional SPDs

The six French SPDs for the 1994-1999 period involved projected co-financed expenditure of5 005 M Ecus in European and national expenditure, combining 2 189 M€ of EuropeanCommunity funding, 1 941 M€ of national public funding and 874 M€ of private sectorexpenditure. The projected European funding involved 1 193 M€ from ERDF, 525 M€ fromESF, 431 M€ from EAGGF and 40 M€ from FIFG.

1 DOMs : Départements d'Outre-Mer



Main strategies of the SPDs

Globally, the main strategies in the Single Programming Documents (SPD) were :- support and stimulation of the economic activity by direct aids to industrial firms and totourism (about 30% of the Structural Funds' participation, and 25 to 30% of the ERDF);- protection and improvement of the environment - especially for the valorisation of touristinterest resources (20% of the ERDF participation in Corsica and in the DOMs);- urban actions - especially in difficult districts (Nord Pas-de-Calais);- continuation of implantation of large infrastructures of external "opening up" (DOMs), butalso internal servicing by road (development of collective transports in urban areas in LaRéunion and in Martinique);- reinforcement of research and development to increase the enterprises' competitiveness;- reinforcement of vocational and technological training, including the endowment of trainingcentres;- development of rural areas and support to the agricultural sector, especially applying to theObjective 5a measures and measures of diversification and valorisation of products.

Appropriateness of the SPDs strategies

The strategy of the SPDs was generally adapted to the circumstances of France at the time.Strategies identified and focused on generally accepted weaknesses in regional priority areas,and involved a balanced programme of interventions to address underlying market failures.

The SPDs strategies addressed the main needs of the Objective 1 regions (transport facilities,water supply, industrial fabric, tourism, etc.) and identified some relevant priorities (SMEs,water infrastructures, rural development, human resources).

Key strengths of the programmes were for example that in NPC as in Corsica, the SPD'sstrategy was part of a long term planning process : the continuation of the coal basin'sconversion in Nord Pas-de-Calais since the 1970s, and the Development Plan for Corsicaadopted in 1993. Other strengths were the integrated strategies between the contractualizedterritorial development strategy (Contrats de Plan Etat-Région) and the European fundsstrategy in all regions.

Effectiveness

When it comes to effectiveness, the evaluation went deeper into the cases of Corsica, FrenchHainaut and Réunion. It appears that the programme was especially effective in terms ofinfrastructures : new or modernized airports and ports, road renovations… The developmentof infrastructures contributed to the economic convergence and opening up (désenclavement)of the West Indies and La Réunion. The modernization and enlargement of airports in theWest Indies enabled the islands to welcome wide-bodied aircrafts (especially interesting fortourism), and created a direct link between La Réunion and continental France. As regards thesupport to the productive sector, the effectiveness analysis is more heterogeneous and moredifficult to make, as few quantitative assessments / evaluations have been undertaken by theregional authorities. In Nord Pas de Calais, the programme had a strong impact on theinvestments of SMEs as well as on bigger companies through a special fund notified to theCommission. The productive sector in the West Indies had more difficulty in carrying outdevelopment projects, partly because of the SMEs weakness to carry out European projects.The programme has given especially good results in agriculture and in the rural sector in



Corsica and La Réunion, with for the latter a higher auto-sufficiency for food production andthe development of specific export paths for both islands. Eventually, the programmes havehad strong effects on supporting human resource development and improving socialconditions thanks to vocational training and to the support given to the economy of solidarity.The added value of Community support was mainly noticeable in the development of multi-annual programming habits.

Efficiency

The efficiency analysis has been based on four case studies. The first two concern financialsupport to industrial units' investment, with the creation of new jobs, the other two are linkedto infrastructures which consolidate the regional economy (Rail trials Centre in Valenciennes,public highways in Saint-Denis de la Reunion). For the industrial investments, the unit costper job created varies from 1 to 3, depending on if it is an additional investment in an existingunit, or a completely new unit. The investment in trial and research infrastructuresconsolidates a regional industrial concentration in Valenciennes in rail (and land) transport asa real pole of competence. The efficiency analysis of the Boulevard Sud of Saint-Denis showsthe difficulty of apprehending an urban project which underwent several evolutions, for asatisfactory final result but a unit cost certainly superior to the initial forecasts.

Impact

The impact of the programme can essentially be measured through the analysis of the socio-economic trends of the regions. Now, macro-economic analysis of the evolution of thevarious Objective 1 regions can not be completely homogeneous as macro-economic databeyond year 1998 are still unavailable for the overseas departments; moreover, there are noindicators of GDP for the employment zones inferior to the regional size (Hainaut français).Nevertheless, it appears that the performances of each region in terms of job creation aresuperior to the French ones (yet, for La Réunion, as the working population increases morequickly, unemployment does not undergo the strong diminution that can be noticed at nationallevels). As for the GDP, it indeed progresses in every region in absolute value, but the relativeimprovement per capita with regard to the European average is weak.

Management and implementation systems

The evaluation also focused on the management and implementation systems in La Réunion'sprogramme. It would not be relevant to draw conclusions from this region for the FrenchObjective 1 programme as a whole. The case of La Réunion can yet be considered as anexample of good practice in terms of management and implementation systems, with thesetting up of a tripartite programming committee that was especially effective and whichallowed a broad horizontal partnership.

Conclusions

To conclude, it seems that each region has been able to adapt its strategy to its initialsituation. This is most noticeable in terms of infrastructure for the overseas departments asthey reduced the gap with the mainland; however, this is less obvious in terms of economicactivities, thus revealing the persisting difficulty of these territories to find their place withinthe exchanges with the continental territory and with the rest of Europe. As for the Nord Pas



de Calais region and Corsica, they have shown their capacity to create activities and jobs; theyare now "phasing out" in the new programming period.

Recommendations

Short termR.1. Improve the culture of evaluation and benchmarkingR.2. Improve the ability of target beneficiaries to present their projects to structural fundsR.3. Restore beneficiaries' confidence by stabilizing and simplifying the legislative andjuridical environment of structural funds' managementR.4. Pay more attention to project generation in order to raise the best projects according tothe strategyR.5. Ensure the coherence and promote synergies between sectoral components of theprogramme

Long termR.6. Any new regional programme should be built on a clear regional long term strategyadopted by all the stakeholdersR.7. For the ultraperipheric regions, specific European strategies should be designed so asto give them a role as an "active frontier" in their regional environmentR.8. At a regional level, a central resource agency should help final beneficiaries to preparetheir projects

1.2. RésuméIntroduction générale

Ce rapport est le rapport national pour la France, établi pour la Commission Européenne dansle cadre de l'évaluation ex post des programmes européens Objectif 1 1994-1999 au niveaueuropéen. La structure du programme de travail et du rapport suivent un cadre établi encommun pour le projet.

L'évaluation couvre les cinq aspects du programme d'investissement : "adéquation" de lastratégie; "efficacité" avec laquelle les objectifs ont été atteints; "efficience" avec laquelle lesprogrammes ont été mis en œuvre; "impact" des programmes; questions de "gestion et miseen œuvre".

Entre 1994 et 1999, six régions françaises étaient éligibles au Programme Objectif 1 :

- en France métropolitaine : la Corse et le Hainaut français (dans la région Nord Pas deCalais),

- les Départements d'Outre-Mer (DOM) de Guadeloupe, Guyane, Martinique etRéunion.

Ces régions (à l'exception du Hainaut) souffraient de leur éloignement géographique desgrands marchés européens, et de l'étroitesse de leurs marchés locaux. Le principal enjeu pourla période 1994-1999 était donc de réduire leur isolement, tout en encourageant leur potentielendogène de développement. Ces enjeux impliquaient des investissements lourds en termesd'infrastructures de base (afin de réduire les effets de l'éloignement), et un effort soutenu en



direction du tourisme, des ressources agricoles, de la pêche et des PME locales, tout enpréservant l'environnement. L'amélioration du système éducatif et de la formationprofessionnelle était également une priorité, non seulement pour le développementéconomique, mais aussi pour surmonter les principales raisons de l'exclusion du marché dutravail, et promouvoir la cohésion sociale.En France, l'étendue de la recherche a été variable selon les régions. Tous les DocumentsUniques de Programmation (DOCUP) ont été examinés en termes d'adéquation des stratégies,tandis qu'un échantillon plus restreint faisait l'objet des autres analyses. Le programme detravail incluait une combinaison d'analyse pour chacune des régions choisies, des entretiensavec les responsables clés des programmes, et un examen des évaluations précédentes et de lalittérature pertinente.

Aperçu des DOCUP régionaux

Les six DOCUP français pour 1994-1999 prévoyaient une dépense totale de 5 005 M Ecus encofinancement national et européen, dont 2189 M Ecus de fonds communautaires, 1 941 M€de financements publics nationaux et 874 M€ d'investissement du secteur privé. Lacontribution communautaire prévue se répartissait entre 1 193 M€ du FEDER, 525 M€ duFSE, 431 M€ du FEOGA et 40 M€ de l'IFOP.

Principales stratégies des DOCUP

Globalement, les principales priorités des DOCUP étaient les suivantes :- soutien et relance de l'activité économique par des aides directes aux entreprisesindustrielles et au tourisme (environ 30% du concours des fonds structurels, et 25 à 30% duFEDER);- protection et amélioration de l'environnement, notamment pour la valorisation desressources d'intérêt touristique (20% de la participation du FEDER en Corse et dans lesDOM);- actions urbaines, notamment dans les quartiers en difficultés (Nord Pas de Calais);- poursuite de l'implantation des grandes infrastructures de désenclavement externe (DOM)mais également de desserte routière interne (développement des transports collectifs en zoneurbaine à La Réunion et en Martinique);- renforcement de la recherche-développement pour accroître la compétitivité des entreprises;- renforcement de la formation professionnelle et technologique, y compris la dotation encentres de formation;- développement de l'espace rural et soutien au secteur agricole, notamment en applicationdes mesures de l'Objectif 5a ainsi que des mesures de diversification et de valorisation desproduits.

Adéquation des stratégies des DOCUP

La stratégie des DOCUP était généralement appropriée aux circonstances françaises del'époque. Les stratégies avaient identifié et s'étaient concentrées sur les faiblesses bienconnues des domaines prioritaires régionaux, et impliquaient un programme d'interventionéquilibré afin de répondre aux échecs sous-jacents du marché.



Les stratégies des DOCUP tentaient de répondre aux principaux besoins des régions Objectif1 (équipements de transports, alimentation en eau, tissu industriel, tourisme, etc.) etidentifiaient des priorités pertinentes (PME, infrastructures d'alimentation en eau,développement rural, ressources humaines).

Les principales forces des programmes résidaient dans le fait qu'en Corse et en Nord Pas deCalais par exemple, la stratégie du DOCUP faisait partie d'un processus de programmation àlong terme : la poursuite de la reconversion du bassin minier en région Nord Pas de Calaisdepuis les années 1980, et la Plan de Développement de la Corse adopté en 1993.L'intégration des stratégies entre la politique contractualisée de développement territorial(Contrats de Plan Etat-Région) et la stratégie communautaire était également une force danstoutes les régions.

Efficacité

En ce qui concerne l'efficacité du programme, l'évaluation s'est penchée sur les cas de laCorse, du Hainaut et de La Réunion. Il apparaît que les programmes ont été particulièrementefficaces en termes de réalisation d'infrastructures : construction ou modernisation d'aéroportsou de ports, rénovation de routes… Le développement des infrastructures a notammentcontribué à la convergence économique et au désenclavement des Antilles et de La Réunion.La modernisation et l'élargissement des aéroports dans les Antilles a permis à ces îlesd'accueillir des avions gros porteurs (particulièrement intéressant au regard du tourisme), et acréé un lien direct entre La Réunion et la France continentale. En ce qui concerne le soutienau secteur productif, l'analyse d'efficacité est plus hétérogène et moins facile, car peu debilans quantitatifs ont été effectués par les autorités régionales. En Nord Pas de Calais, leprogramme a eu un impact fort sur les investissements des PME ainsi que sur les plus grandesentreprises à travers un fonds spécial notifié à la Commission. Le secteur productif dans lesAntilles a eu plus de difficultés pour porter des projets de développement, en partie du fait dela faiblesse des PME pour porter des projets d'envergure. Le programme a donné des résultatsparticulièrement significatifs dans le secteur agricole et rural en Corse et à La Réunion avecpour cette dernière une plus grande autosuffisance alimentaire et pour les deux îles ledéveloppement de filières spécifiques à l'export. Enfin, le programme a contribué fortementau développement des ressources humaines et à l'amélioration des conditions sociales, àtravers le soutien à la formation professionnelle et aux structures de l'économie solidaire. Lavaleur ajoutée communautaire s'est manifestée notamment dans le développement des usagesde programmation pluriannuelle.

Efficience

L'analyse d'efficience quant à elle, a été menée à travers quatre études de cas. Deux d'entreelles concernent le soutien à l'investissement dans des unités industrielles, avec création denouveaux emplois; les deux autres sont liées à des infrastructures consolidant l'économierégionale (Centre d'Essais Ferroviaires près de Valenciennes, voirie publique à St Denis de LaRéunion). Pour les investissements industriels, le coût unitaire par emploi créé varie dusimple au triple, selon qu'il s'agisse d'un investissement complémentaire à une unité existante,ou d'une unité complètement nouvelle. L'investissement en infrastructures d'essai et derecherche conforte une concentration industrielle régionale à Valenciennes dans les transportsferrés comme véritable pôle de compétences. L'analyse d'efficience du Boulevard Sud deSaint-Denis montre la difficulté à appréhender un projet urbain qui a subi plusieurs



évolutions, pour un résultat final satisfaisant mais un coût unitaire certainement supérieur auxprévisions initiales.

Impact

L'impact du programme peut essentiellement se mesurer à travers l'analyse des tendancessocio-économiques des régions. Pourtant, l'analyse macro-économique de l'évolution desdifférentes régions Objectif 1 ne peut être complètement homogène du fait de l'indisponibilitédes données macro-économiques au-delà de l'année 1998 pour les DOM; de plus, il n'existepas d'indicateur de PIB pour les zones d'emploi inférieures à l'échelon régional (c'est le cas duHainaut français). Cependant, il est apparu que sur la période, les performances de chaquerégion en termes de création d'emploi sont supérieures à celles de la France entière (pourtant àLa Réunion, le fort accroissement de la population active empêche le chômage de connaître laforte baisse qu'il a connu au niveau national). Quant au PIB, il progresse dans toutes lesrégions en valeur absolue, mais la relative amélioration du PIB par habitant par rapport à lamoyenne européenne est limitée.

Systèmes de gestion et de mise en oeuvre

L'évaluation s'est également penchée sur les systèmes de gestion et de mise en œuvre dans lecadre du programme Objectif 1 à La Réunion. Il ne serait pas pertinent de tirer desconclusions de cette région pour l'ensemble des programmes Objectif 1 français. Le cas de LaRéunion peut en tout cas être considéré comme un exemple de bonne pratique en termes degestion et de mise en œuvre, avec la mise en place d'un comité de programmation tripartiteparticulièrement efficace et qui a permis un partenariat horizontal élargi.

Conclusion

Pour conclure, il semble que chaque région a su trouver une stratégie adaptée à sa situationinitiale. Pour les DOM, le résultat est notamment visible en termes de rattrapage desinfrastructures; ceci est cependant moins évident pour les activités économiques, ce quisouligne la difficulté persistante de ces régions à trouver leur place dans les échanges avec leterritoire métropolitain et l'Europe. Le Nord Pas de Calais et la Corse ont montré quant à euxleur capacité à créer de l'activité et des emplois; ils sont désormais en programme "transitoire"pour la période 2000-2006.

Recommandations

Court termeR.1. Améliorer la culture de l'évaluation et de l'échange des bonnes pratiquesR.2. Améliorer la capacité des bénéficiaires cibles à présenter des projets dans le cadre desfonds structurelsR.3. Restaurer la confiance des bénéficiaires en stabilisant et simplifiant l'environnementlégislatif et juridique de la gestion des fonds structurelsR.4. Prêter plus d'attention à la génération de projet afin de faire remonter les meilleursprojets en fonction de la stratégieR.5. Assurer la cohérence et promouvoir les synergies entre les composantes sectorielles duprogramme



Long termeR.6. Tout nouveau programme régional devrait être construit sur une stratégie régionaleclaire à long terme, adoptée par l'ensemble des acteurs clésR.7. Pour les régions ultra-périphériques, mettre en place des stratégies européennesspécifiques pour leur donner le rôle de "frontière active" dans leur environnement régionalR.8. Mettre en place au niveau régional une agence ressource centrale afin d'aider lesbénéficiaires finals à préparer leurs projets.



2. INTRODUCTION

DG REGIO of the European Commission commissioned a Community-wide ex postEvaluation of Objective 1 1994-99. ECOTEC Research and Consulting was appointed toundertake this evaluation, and co-ordinated a network of national evaluators across the 11Member States eligible for Objective 1 support. The overall objective of the study is toprovide an evaluation of Objective 1 at the level of the EU. The evaluation covers five coreissues : appropriateness, effectiveness, efficiency, impact, management and implementationsystems.

As part of this evaluation process, a series of national reports were undertaken to provide aninput into the overall report at the level of the EU. This is the national report for Franceundertaken by Reverdy Associés.

The key issues for this study as given by the Terms of Reference, and the related keyquestions are:

1. AppropriatenessWere the strategies adopted appropriate and relevant to regional circumstances ? How did thenational/regional economic and social situation evolve during the programme period ? Did thestrategies change over the programming period and if so, were changes driven by externalfactors or by absorption problems ?

2. EffectivenessWere the objectives at priority level in the SPDs clearly defined and quantified ? What has theachievement of these objectives been ? What were the processes which led to effectiveness orlack of effectiveness ?

3. EfficiencyWhat was the unit costs of the outputs achieved ? How much time was taken to implementprojects against initial work programmes ? In case some of the examined projects were notcompleted, why did they not function as planned ? How did the management impact onefficiency in project implementation ?

4. ImpactWhat was the impact of the Structural Funds on economic and social cohesion ? What werethe economic effects of the Structural Funds investments in terms of convergence of incomelevels ?

5. Management and implementation systemsHow did the partnerships function in terms of membership and operating and how did theycontribute to the effectiveness in implementing the Structural Funds ? Were the monitoringsystems effective in terms of quality and timeliness of information ? What was the quality ofproject selection procedures ? What was the quality of control mechanisms ? What was thequality and utility of evaluation activities ? To what extent did horizontal principles such asequal opportunities and the environment impact on the management and implementationissues ?



6. Community added valueWhat has been the extent of Community added value? What effect does the scale ofintervention have on this ?

7. Lessons for current and future programmingWhat were the strengths and weaknesses in the planning and/or implementation of theObjective 1 programmes ? To what extent have the strengths been built on and weaknessesaddressed in the 2000-06 programming period ? What are key lessons to be taken into accountfor the post 2006 programming ?



3. METHODOLOGY

This Member State Report was based on the available literature, and on the various interviewsboth at a regional and national level.

Four regions have obtained a postponement for the closing date of their programmes : the endof payments was forecasted for December 2001, but has been delayed until September 2002for Corsica, the French Hainaut, Guadeloupe and Martinique. These regions having not yetcompleted their final reports, it has not been possible to obtain final data regarding theeffective realisations, or any homogenous financial data. As regards La Réunion, theprogramme managing authorities were able to give us their final report on ESF in July 2002,and for the other funds by mid September 2002. For Guyane, the final report was expected forthe beginning of October 2002. In January 2003, this report had not been communicated to theex post evaluators.

For this evaluation work, the European Commission has retained three regions on thefollowing themes :

Corsica : effectiveness analysis

French Hainaut : effectiveness analysis and efficiency case studies

La Réunion : effectiveness analysis, efficiency case study and analysis of themonitoring and implementation system

The analysis has been based upon the documents given by every region (State representativesin the region, Regional Authorities…), as well as upon interviews with the programme drivingforces in the visited regions (members of the monitoring committee, vetting services,representatives of the socio-economic world). For the three case study regions, the number ofpeople interviewed is as follows :

Corsica : 10 people

French Hainaut : 18 people

La Réunion : 22 people

(see in Annex the list of these people)

A literature review is also presented in the annex.

We must draw the attention to two limits of this evaluation work :

• the methodology did not allow for possible investigation in regions Guyane,Martinique and Guadeloupe. No generalization was therefore possible for thoseterritories which have very different characteristics from La Réunion.

• the evaluation only focused on the Objective 1 programme when in fact, part of themost innovative actions were implemented within the REGIS II programme in theDOMs.



4. APPROPRIATENESS OF STRATEGIES ADOPTED AND PURSUED 1994-1999

This passage studies the appropriateness of the strategies adopted in 1994, and pursued overthe 1994-1999 period. The analysis covers the 6 SPDs of the 6 French Objective 1 regions.

Section 4.1. underlines the key issues of the French economy and of its regions, as identifiedin the SPDs in 1994, and outlines the development of the economy over the 1994-99 period.Section 4.2. describes the strategies of the SPDs as adopted and compares actual and plannedoverall expenditure for the period. Section 4.3. assesses the geographical spread of the FrenchSPDs. Section 4.4. gives the views of the ex ante evaluators on the appropriateness ofstrategies adopted in 1994. Finally, section 4.5. presents the key conclusions on theprogramme's appropriateness by region.

4.1. Key issues in 1994 and their evolution up until 1999

KEY ISSUES AT A NATIONAL LEVELGeneral economic data on the French economy hides major regional disparity, even incontinental France (the GDP per capita in Corsica only reaches half of that of the Ile deFrance). Taking into account the overseas departments (DOMs), the gaps become much morepronounced, as the GDP per capita in the DOMs only reaches half of Corsica's.

The importance of unemployment is also very heterogeneous : again, the overseasdepartments have unemployment rates equivalent to three times the national average.Structural characteristics of the economy are also heterogeneous according to the regions, andthe rate of the workforce occupied in the industry reveals large discrepancies between thedifferent economical structures : from 7% in Corsica, to 22,8% in the Nord Pas de Calaisregion in 1995.

Between 1994 and 1999, the regionalized support from structural funds (objectives 1, 2 and5b) covered 46% of the French population.

They were distributed as shown in the following table :

Total Structural Funds forregionalized supportFRANCEin M€ In %

Obj. 1 1994-1999 2190 27%

Obj. 2 (1994-1996 and 1997-1999) 3769 46%

Obj. 5b 1994-1999 2236 27%

Total regionalized support 8195 100%Source : European Commission

The total structural funds support under the Objective 1 (2190 M Ecu) represented 27% of theregionalized support for 1994-1999.

Between 1994 and 1999, six French regions were eligible under the Objective 1 programme :



- in metropolitan France : Corsica and the French Hainaut (in Nord Pas-de-Calais region),

- the overseas departments of Guadeloupe, Guyane, Martinique and La Réunion.

These regions (except for the French Hainaut, eligible under Objective 1 owing to itsterritorial adjacency to Hainaut in Belgium) suffered at different stages from their geographicdistance from the great European markets, and from the narrowness of their local markets.The main challenge for these regions for the period going from 1994 to 1999 was to reducetheir isolation, and at the same time encourage the endogenous potential of development.These challenges implied great investments in basic infrastructures (to reduce the effects ofdistance), and a sustained effort towards tourism, agricultural resources, fisheries and the localSMEs, while preserving the environment. The improvement of education and vocationaltraining was another priority, not only for the economic development, but also to overcomethe principal reasons of exclusion of the job market, and to promote social cohesion.

The French regions under Objective 1 for the 1994-1999 period had been eligible becausetheir GDP per capita was inferior to 75% to the Community average.

The diagnosis and situations were nevertheless different for the French Hainaut, characterizedby a fragile industrial economy which was still changing, and for the overseas regions (LaRéunion, Martinique, Guyane, Guadeloupe), characterized by a strong dependence on themainland, a predominating tertiary sector and a limited primary sector.

The following table gives quantitative information on three indicators : population figures,unemployment rates, and GDP per capita. Figures are given both for 1994 and 1999. Theyshow the main evolutions during the programme period for the major key issue : social andeconomic cohesion. Specific key issues are then identified separately for Corsica, FrenchHainaut and the DOMs as a whole.

Compared indicators of social and economic cohesion in the French Objective 1regions – Situation in 1994 and evolution to 1999

Corsica FrenchHainaut

Réunion Guadeloupe Guyane Martinique France

Surface (km²) 8 680 2 520 2 512 1 702 83 534 1 128 632 841

Population 1994(thousands)

258 842 (in1990)

642 411 142 379 59 353

Population 1999(thousands)

260 835 706 422 157 381 60 186

Unemploymentrate 1994 (ILO)

12,5% 19% 31,7% 24% 18,2% 26,2% 12,2%

Unemploymentrate 2000 (ILO)

12,5% 13,4%(NPC)

33,1% 26,1% 22% 27,7% 9,6%

GDP / capita PPS1994

82 82 (NPC) 46 40 48 54 105

GDP / capita PPS1999

81 80(NPC)

51 (e) 56 (e) 51 (e) 64 (e) 99

PPS : (purchasing power standards), UE-15=100(e) : estimationsSource : INSEE (RP 1990, 1999, Omphale, ELP), EUROSTAT



KEY ISSUES IN CORSICA

Introduction to the regionCorsica, a region situated in the centre of the Gulf of Genoa, is the most mountainous islandof the western Mediterranean sea. With 258 000 inhabitants in 1994 and a density of 30inhabitants by km² in 1995 (vs. 107 in continental France), Corsica has the lowest populationdensity of all the French continental regions. Moreover, this population is very unequallyspread over the island's territory : almost half of the population is concentrated in the urbancentres of Bastia and Ajaccio.

Corsica also has the lowest GDP per capita among the French continental regions. Expressedin PPS (Purchasing Power Standards, UE15=100), this GDP was only of 82 in 1994, versus104,8 for France taken in its totality.

The Corsican regional unemployment rate was similar to the French national average in 1994.

Identification of specific key issuesThe specific key issues identified for this region were :

SMEs performance : a lack of entrepreneurship spirit - The Corsican economic sector wasmarked by the pre-eminence of service activities and small-size companies, combined with aweakness of productive activities. The island lacked raw materials and was excluded frommajor communication networks, consequently it had not participated in the industrialmovement. The industrialisation rate of Corsica was equivalent to that of the overseasdepartments.

In 1994, the industrial companies seemed to be insufficiently developed : too small, toovulnerable, without enough strength to win new markets, or even to resist to externalcompetition on the local market. The economic sector was based on very small productionunit - usually a family size firm with no or few wage earners.

Lastly, local behaviour did not seem open to entrepreneurship: compared to the insularpopulation, the employees of State services and local authorities were 20% more numerous onthe island than on the mainland (the public and para-public sector represent a third of thewage earners).

Transport conditions : an obsolete network of roads - In 1994, the network of roads wasconsidered to be obsolete and it did not fulfil the requirements of traffic and road safety. Onthe other hand, Corsica was well provided with airports (Ajaccio, Bastia, Calvi and Figari).90% of the sea transports transit through the ports of Bastia and Ajaccio. Transports betweenthe mainland and the island are highly subsidized as part of the policy of "territorialcontinuity".

Education and training situation : low qualification of labour - In 1994, the workforceseemed to be under qualified : 38% islanders had no diploma, versus 26% on continentalFrance. The lack of initial education was a real handicap for the Corsican economy and anadditional factor to explain its vulnerability to unemployment.

The unemployment rates (11,8% in December 1993) was considered to be the major handicapof the island - especially the unemployment of the young and long-time unemployment.



Agricultural and fisheries matters : mainly family-size agricultural activity and a small-scale fishing production - In 1994, the rural population represented 41% of the totalpopulation (versus 26% in continental France). Corsica was the region were the mostimportant part of the population lived in a predominantly rural area. The agriculturalproduction found it hard to satisfy local demand and difficult to compete with the strongcompetition from other Mediterranean countries. It therefore had to specialize in certainspecific products (such as almonds and chestnuts).

Fishing was essentially done on a small-scale. It was characterized by a decrepit fishing fleetand it only offered a few jobs. The fish farming production only represented 50% of the totalconsumption. On the other hand, the fish farming sector, even whilst only offering 90permanent jobs in 1994, was the second exporting activity of the island.

Geography : low density population - In 1993, the population density of Corsica was 29inhabitants per km² : it was the lowest density of all of continental France as well as otherneighbouring European regions. Most inhabitants live on the coastline : 45% of theinhabitants reside in the two towns of Ajaccio and Bastia.

Evolution of these key issues to 1999In 1999, in spite of a rapid employment growth over the previous years (essentially due to thegrowth of female activity), unemployment was still higher than the national average (12,5%vs. 9,6%), with long term unemployed representing almost one third of total unemployed. TheGDP per capita was reaching 82% of the community average (placing Corsica between Spainand Ireland). The households' gross disposable income stood 7% below the national average.In spite of a positive evolution, female activity remained below the national average, and theeducation of youth was still insufficient (the proportion 15 to 24 year olds still studying was 5points below national average) thus placing the region amongst the last in this sector.

KEY ISSUES IN FRENCH HAINAUT (NORD PAS DE CALAIS REGION)Introduction to the regionThe French Hainaut is composed by the three "employment areas" (zones d'emploi) of Douai,Valenciennes and Avesnes-sur-Helpe, in the Nord Pas de Calais region. In 1994 these threeemployment areas represented 21% of the region’s population. They were eligible forObjective 1 for the period 1994-1999 thanks to their territorial proximity with the BelgianHainaut, which was also an Objective 1 area. Furthermore, the GDP per capita was estimatedto be less than 75% of the Community average in 1994 (but there are no existing statistics onthe GDP at an infra-regional level).

In 1994 the unemployment rate in the region was one of the highest in metropolitan France(19% in the districts concerned, versus 12,3% in metropolitan France). The French Hainaut isindeed traditionally an industrial area, whose economy and territory have been marked by thecrisis of the old industries (coal mining, metal processing and to a lesser extent textile andclothing) and by the changes undergone by the industries on which the local economy(automobile industry, transportation equipment) has been based since 1975. The three fieldsnevertheless showed signs of being handicapped at various degrees.

From 1994 to 1999, the region has benefited from European programmes : Objective 1,Objective 2, Objective 5b, RETEX, URBAN, RECHAR. The main overall goal of those



programmes was to diversify the economic activity of the region, which was facing greatrestructuring in traditional industrial sectors.

Identification of specific key issuesIn 1994, priority had been given to the territorial reorganisation and requalification in adouble perspective of rehabilitation of the area's attractiveness and creation of economicactivities, upon the following statements :

SMEs performance : a fragile industrial economy… – The industrial structure of the arearemained fragile and had not completed its mutation : the traditional industries, threatened bythe structural weakness of the market, represented 25% of all industrial jobs. The more recentindustries (automobile industry, railroad equipment) on which the conversion was based, wereentering into a phase of technologic mutation and of productivity improvement : thoseindustries had losing jobs since 1990. Finally, high potential industries (Para chemistry –pharmaceutical industry, food industry, publishing, electrical construction) were establishedin the area, but their growth capacity was not sufficient. Traditionally, there had been fewlinks between industry and territory. Development was not anchored within the territory, andsubcontractors had little entrepreneurial competence.

… but a high growth potential : the network of SMEs – The Objective 1 area stood outdistinctly from the local average thanks to its dynamic SMEs, especially in the vicinity ofValenciennes. This dynamism on the part of the SMEs' needs nevertheless to be put intoperspective, for it was vulnerable insofar as there hadn’t been enough set ups in conversionfields made from strong industrial groups.

Education and training situation; labour market conditions : a strong disruption of thesocial structure… but a good relative degree of labour qualification – The decline ofindustrial activities since the 70s had led to the destruction of a third of all jobs. At thebeginning of the 90s the unemployment rate reached 17 to 20% depending on the areas, andmainly concerned the young and the lesser qualified. This great imbalance of the job marketwas also noticeable through a strong emigration of the active population, especially of thoseunder 30.

According to the SPD, the social benefits made it possible to limit the handicap in averageincome of the inhabitants, which was 23% under the national average and 14% under theCommunity average.

The major problems that were identified were :- A great number of young people who (mainly for social reasons) dropped out from the

education system without qualifications. This concerned more the Objective 1 area thanthe rest of the region, taking into account poverty and exclusion problems that werecharacteristic of it.

- The necessary re-orientation of qualified workers (around 10 000 jobs concerned) oftraditional sectors (metallurgical industry).

- The difficulties of the local industry to provide jobs for the active young people whoseeducation had strongly increased : the rate of young people coming from technicaleducation who found jobs was 35% below national average. Apart from the weakemployment rates of local industries, the problem also lay in poor diversity of educationwhich followed the structure of the former industrial network too closely.



Agricultural matters : a weakened agricultural sector – Considering the weakcompetitiveness of farming concerns and the decline of economic conditions of the farmmarkets, it could be surmised in 1994 that European aids during the previous period (andthrough other programmes) had not succeeded in slowing down the drift from the land, thedepreciation of the land, and the weakness of farm concerns.

Evolution of these key issues to 1999In 1999, on the basis of a social development index2, the three Objective 1 "employmentareas" (zones d'emploi) remained among the less privileged of the region. Nevertheless, thejob creation capacity of the enterprises of the area had evolved in a positive way. Theeconomic fabric, even if it was still insufficiently developed, was active. There remained totranslate this favourable evolution on the social plan, where the situation still was worrying.

KEY ISSUES IN THE OVERSEAS DEPARTMENTSFor the 1994-1999 period, the overseas regions also benefited from the Community InitiativeREGIS II, but our analysis will focus on the realisations financed in the framework of theObjective 1 programme.

Introduction to La RéunionLa Réunion Island is one of France's overseas regions. Having become a French"département" in 1946, the region became a fully fledged local government unit in 1982. LaRéunion consists of only one department.

Situated in the southern hemisphere, the island is located in the Indian Ocean to the south-eastof Madagascar and the African continent. It is a mountainous, volcanic island. The populationwas 642 000 strong in January 1994. The GDP per capita in 1994 only reached 46 (in PPS :Purchasing Power Standards).

The region's remoteness from the European continent and its insularity have had a seriouseffect on the development of productive activities, due to the increased transport costsinvolved and the small size of the local market. In addition, the combined effects of highsalaries (which are much higher than those in neighbouring developing countries) andinsufficient productivity, mainly as a result of the level of qualification of the workforce, hasbadly affected the region's competitiveness. The ratio export/import of goods is therefore verylow (only 10%).

Introduction to GuadeloupeThis overseas department of 1705 km² is the largest island of the Small West Indies (PetitesAntilles). This archipelago comprising 8 peopled islands forms a mono-departmental region.Its population was estimated around 411 000 inhabitants in 1994.

2 The social development index reflects the average living conditions of the inhabitants of each of the region's 15employment area (zone d'emploi). It is composed from the unemployment rate, the share of long term unemployment, jobseekers qualification, young people unemployment, as well as success rates at the baccalauréat (high school diploma).



Expressed in PPS (Purchasing Power Standards), the GDP per capita only reached 40 in 1994,versus 104,8 for total France.

In spite of the improvements of local production, the Guadelupian economy remains verydependant on importations. The weight of public transfers and European subsidies (especiallyfor the work to be done on infrastructure) stimulates the activity. Strong hopes have beenplaced upon the rejuvenation of the touristic activity.

The number of unemployed had increased a lot between 1986 and 1993 as the job market hadbecome very selective, to the detriment of the less qualified. The unemployment rate wasalmost stabilized at 26% in 1993.

Introduction to GuyaneGuyane has the particularity to be the only EU region located on the South Americancontinent. It spreads out over 84 000 km² between Brazil and Surinam. This makes it thelargest of the 26 French regions. Excluding the coastal zone (which welcomes more than 90%of the population), Guyane is covered by a very dense equatorial forest. The only ways topenetrate inside the region are the rivers that form a dense hydrographical network, which ishowever not easily accessible by boat.

The driving force of the local economy is the spatial centre of Kourou, that makes of Guyanethe richest area of Latin America. The public transfers generated by the spatial centre bring ina major complement of resources. Growth is then increased by household consumption (callto importations). The search for economic diversification thus seemed necessary, but thenarrowness of the internal market and obstacles linked the fact that the region is hemmed inmake it difficult.

In 1994, population was about 142 000 inhabitants. Half of them were under 25. Theunemployment rate was around 20% of the active population.

Expressed in PPS (UE15=100), the GDP per capita represented 48 in 1994.

Introduction to Martinique

Martinique is an overseas department of 1100 km², located in the middle of the West Indiesarc. It is a volcanic and hilly island. Its population was estimated at around 379 000 in 1994.

Within the last few decades, Martinique has turned from a rural traditional society to amodern and largely tertiarized society. The primary sector only occupies 7,5% of the activepopulation. An important public sector as well as major social transfers have favoured thegrowth of an economy mostly geared towards consumption. In 1994, the GDP per capitaexpressed in PPS represented about 55% of the Community average.

The changing migratory behaviours (the young from Martinique leaving for continentalFrance to find a job there) and the economic crisis resulted in increased unemployment rates -from 15% in 1980 to 30% in 1986. Some reflationary measures combined with a morefavourable conjuncture have enabled the region to curb this trend, but unemployment ratesstill reached 26,2% of the working population in 1994, versus 12,2% in France.



Identification of specific key issues for all the overseas departmentsIn 1994, the four overseas departments (La Réunion, Guadeloupe, Guyane and Martinique) allpresented rather similar characteristics (with different intensities) :

Transport conditions : a network of basic infrastructures still to develop – faced with agrowing road traffic in the DOMs, important works of improvement of the road network wereindispensable. Moreover, major investments had began during the previous programmingperiod (1989-1993) in port and airport infrastructures, and some developments andadjustments remained to be realized around these infrastructures.

SMEs performance : a low secondary productive sector – The local economy was partlybased on the public tertiary sector and social transfers. As for the secondary sector, most ofthe enterprises in the DOMs were very small firms (under 10 salaried staff) in the agri-business or tourism sectors. Remoteness from the European continent and insularity (for 3 ofthe 4 DOMs) weighed heavily on the development of productive activities.

Agriculture was still one of the essential components of productive activity with the cane-sugar-rum sector (filière), and banana in the West Indies.

Education and training: a lack of infrastructures – in spite of important efforts made in theprevious period of programming (which had led to an increase in the level of qualification ofthe population), La Réunion for example still lacked educational infrastructures (secondaryschools and high schools).

Labour market conditions : high unemployment rates – Partly due to the weakness ofproductive activities and to a high demographic growth (especially in La Réunion andGuyane), unemployment mainly affected women and young people.

Conditions relating to Research and Development : disparities according to the regions -In Guyane, two technological centres were likely to have a driving effect on the regionaleconomy : the spatial activities around the pole of Arianespace, and research around thetropical ecosystems for example. In the other regions, this sector was less developed.

Evolution of these key issues up until 1999Over the period going from 1994 to 1999, the alignment of the social benefits (with theexception of the Insertion Minimum Income3) and of the minimum wage (SMIC) over themainland rates favoured growth (until 1996). Moreover, new forms of subsidised jobs cameup with the July 1994 law (Loi Perben) and with the implementation at the national level ofthe Emplois-Jeunes in 1998 (jobs especially created for the young). These contracts quicklyhad a strong weight in social and economic terms in the DOMs where unemployment was oneof the priorities. In 1999, it appeared that the enhancement of the productive environment wasstill the priority. Unemployment was still structurally high. In the agricultural sector, thetraditional sectors (filières) were still fragile, and the potential for their diversificationremained under exploited. In some areas, the low mobilization of water resources hindered thedevelopment of agriculture. Moreover, tourism in the French West Indies (which was one oftheir opportunities of development), suffered a decline from 1999 onwards (see §5.2.2). Thisdecline is disappointing considering the high hopes that had been placed on tourism. It isbadly affected by the competition from other Caribbean islands (The Dominic Republic andCuba). It seems that tourism in these islands has to reassert its brand image by developing the 3 The alignment of the RMI is effective since January 2002 with the Orientation Law for Overseas regions (LOOM).



promotion and the structure of the tourist policies. But the decline is also due to the airtransport policy which being a monopoly for the overseas departments services, is highlypriced4. The new programmes for 2000-2006 have focused on vocational training in thetourist sector.

Evolution of the national institutional context over the periodGlobally for all the regions, the promulgation of the law of 1993 related to employment andvocational training was a new step towards decentralization. It strengthened the role of theRegional Authorities in the definition of the regional training policy : competences in terms oftraining and insertion of young people without qualification were transferred to the Regions,as well as the necessary adoption of a Regional Plan for Development of vocational trainingfor the young. This aimed at making the different training programmes coherent and at easingyoung peoples' access to the job market. Finally, in 1998, two national laws had an impact atthe local level : the law on the reduction of the workweek, and the Law against exclusions.

Global national economic evolution over the periodFrom 1994-1995 onwards, the French economy had growth rates comparable to those of thelate 1980s : whereas the national GDP only increased by 9% between 1990 and 1997 (i.e. a bitmore than 1% per year on average), growth strengthened from 1998 onwards (3,1% in 1998and 2,9% in 1999). Household consumption and enterprises investments were the pillars ofthis growth.

Simultaneously, unemployment had strongly decreased from summer 1997 onwards (inMarch 2000, the levels of unemployment were equivalent to those of 1992, i.e. 10% of theactive population).

4.2. Strategies adopted in the Single Programming DocumentsThe six SPDs (DOCUP) have been approved by the European Commission on 29 July 1994.

4.2.1. Main aspects of planned strategy

In order to find an answer to the main issue of the Objective 1 programmes, which is socialand economic cohesion within the European Union, the 6 French regions gave priority to twomain objectives :

- development of the economic activity in the private sector,- improvement of the qualifications of the population.

These two objectives present some complementarities. The second one has a long term targetas it may involve initial education (in the DOMs) as well as vocational training.

Secondary objectives are present in all regional strategies :

- Territorial balance and environment protection : territorial balance of the distribution ofpopulation within the region is one of the main concerns in Corsica and La Réunion, witha risk of human desertification in the remote and mountainous areas of the islands. InNord Pas de Calais Objective 1 area, the main concern is related to the migratory deficit of

4 Source : INSEE Antilles Guyane, in Antiane n°49 – Martinique – Juin 2001



these industrial districts. This is partly due to lack of jobs but also to the bad environment.That is why the NPC SPD put in its priority the territorial requalification.

- External opening up of the territories : this objective is related to infrastructures that linkthe regions with continental Europe. This is one of the conditions of attractiveness for newprivate investments in productive sectors (SMEs and tourism).

These objectives can be summarized in the following objective structure :

Objective structure of the French Objective 1 programmes

Mix of programmesIn the initial SPDs, the mix of European funds globally appeared as coherent with the strategyand the objective structure of the programmes : as regards ESF and ERDF, the support tovocational training was intended to strengthen the attractiveness of the region so as to drawnew enterprises. As for EAGGF and ERDF, the support to heavy water providinginfrastructures for example (ERDF) corresponded to the objectives of productiondevelopment, balanced territorial distribution and environment protection of the EAGGF.

Fund mixing was intended to strengthen the complementarities between the objectives of thestrategy.

4.2.2. Main planned components (Priorities)

For the period 1994-1999, 2189 M Ecus of community subsidies had been granted to theregions under Objective 1, according to the following repartition :

Social and economic cohesion

Development of theeconomic activity

Improvement ofqualifications

External opening up ofthe territory

Territorial balance andenvironmental protection

Main issue

Mainobjectives

Secondaryobjectives



Initial composition of the 6 French Objective 1 programmes

Amount ( M Ecu 1994)

Public expenses

Structural Funds

Programme

1994-1999 TOTAL

Total CE ERDF ESF EAGGF FIFGTotal national

expensesTotal public

expenses

Privateexpenses

Corsica 679 250 147 31 64 8 308 558 121

% 100% 37% 22% 5% 9% 1% 45% 82% 18%

French Hainaut 1 340 440 308 82 49 / 543 983 356

% 100% 33% 23% 6% 4% / 40% 73% 27%

Réunion 1 267 660 320 183 149 8 406 1066 201

% 100% 52% 25% 14% 12% 1% 32% 84% 16%

Guadeloupe 794 345 160 104 75 6 352 697 98

% 100% 43% 20% 13% 9% 1% 44% 88% 12%

Guyane 304 165 92 36 27 10 122 287 17

% 100% 54% 30% 12% 9% 3% 40% 94% 6%

Martinique 621 330 166 89 67 8 210 540 81

% 100% 53% 27% 14% 11% 1% 34% 87% 13%

TOTAL FRANCE 5 005 2 189 1193 525 431 40 1941 4131 874

100% 44% 24% 10% 9% 1% 39% 83% 17%Source : initial SPDs in 1994

Components of the initial SPDs can be aggregated into the above four objectives, according to the following table :



Main Planned Components of the French Objective 1 programmesCorsica French Hainaut Réunion Guadeloupe Guyane Martinique

Development of theeconomic activities

- Economic growth- Tourism and

cultural heritage- University,

research and newenergies

- Land & seaproducts

- Support andstimulation ofeconomic activities

- R&D, technologydiffusion

- Productive sectors- Objective 5a and

food processing- Agricultural

production- Fisheries

Economicbalances

- Support toindustry, servicesand craft

- Fisheries- Tourism- Agriculture- Infrastructures of

support toeconomic activities

- Industry- Tourism- Trade and craft- Agriculture- Fisheries and

aquaculture

Improvement ofqualifications

Human resourcesdevelopment


Qualification anddevelopment ofhuman potential

Social balances Human resourcesenhancement

Qualification andenhancement ofhuman resources

External opening upof the territories

External openingup and supportinfrastructures

(included in supportto economicactivities)

- Opening up- Infrastructures to

supportdevelopment

Spatial balances External andinternal opening up

Opening up

Territorial balanceand environmentalprotection

Environment Territorialrequalification

- Environment tosupportdevelopment

- Agricultural andrural development

- Spatial balances(ruraldevelopment)

- Ecologicalbalances

Forestry and ruraldevelopment

- Territorialdevelopment

- Environment- Rural

development

Source : SPDs

Some components answer to more than one objective. For instance, tourism and cultural heritage in Corsica are linked with economic activitiesbut also with territorial balance and environmental protection. Agricultural and rural development are related to economic development but alsoto territorial balance and environmental protection mainly in La Réunion.



On this basis, the distribution of the programme components can be illustrated by thefollowing schemes :

Corsica - Programme distribution per objective (in % of total initial cost)

Dvlpt of economic activities

52%

Territorial balance & environme

ntal protection

13%External

opening up of

territories 22%

Improvement of

qualifications

13%

Hainaut (F) - Programme distribution per objective (in % of total initial cost)

Improvement of

qualifications

15%


ntal protection

36%


49%

Réunion - Programme distribution per objective (in % of total initial cost)

Improvement of

qualifications

22%


ntal protection

29%

External opening up

of territories

15%


34%

Guadeloupe - Programme distribution per objective (in % of total initial cost)

External opening up

of territories

24%


ntal protection

16%


43%

Improvement of

qualifications

17%

Guyane - Programme distribution per objective (in% of total initial cost)


51%


ntal protection

10%

Improvement of

qualifications

18%

External opening up

of territories

21%

Martinique - Programme distribution per objective (in% of total initial cost)

Improvement of

qualifications

28%


37%


ntal protection

24%External

opening up of

territories 11%

Source : initial SPDs



France - Programme distribution per objective (in % of total initial cost)

External opening up

of territories

13%


ntal protection

25%

Improvement of

qualifications

18%


44%

Source : initial SPDs

The respective weight of each component shows the order of priority granted to the 2 mainobjectives :

- development of economic activities : 44% of the planned expenditure- improvement of qualifications : 18% of the planned expenditure

It must be underlined though that territorial balance and environmental protection represented25% of the initial programme, hence showing the weight of measures of requalification inNord Pas de Calais, and water provision in the DOMs for example.

There is indeed appropriateness of the main components according to the main objectives.

4.2.3. Expenditure planned and actual

The following table compares the programming as it had been foreseen in the initial SPDs, tothe actual programming (last reprogramming of the SPDs) and to the effective payments,when the information was available.Having the regions not established a closing balance of their respective programmes (exceptfor La Réunion in September 2002), information is not always available or updated.

Moreover, we have not been able to obtain from the regions detailed data per year.



Overall Expenditure by region

in M€ TOTAL Total EC ERDF ESF EAGGF FIFG National PublicExpenses

Privatesector

Corsica (13/05/02)Planned* 679 250 147 31 64 8 308 121Revised** 741 250 152 31 64 3 347 136Actual 597 189 103 25 58 2 308 101% realization*** 81% 76% 68% 81% 91% 67% 89% 74%

French Hainaut (30/06/02)Planned* 1340 439 308 82 49 / 543 356Revised** 1353 457 335 82 40 / 542 353Actual 1180 342 233 82 27 / 544 295% realization*** 87% 75% 70% 100% 68% / 100% 84%

Réunion (end 2002)Planned* 1267 660 320 183 149 8 406 201Revised** 1272 687 350 192 142 4 433 152Actual 1142 640 317 191 129 3 410 192% realization*** 90% 93% 91% 99% 91% 75% 95% 61%

Guadeloupe (30/06/02)Planned* 794 345 160 104 75 6 352 98Revised** 746 357 171 105 77 4 nc ncActual 631 311 147 96 65 3 nc nc% realization*** 85% 87% 88% 92% 84% 75%

Guyane (end 2002)Planned* 304 165 92 36 27 10 122 17

Revised** 172 102 37 27 6111 (except national

expenses linked toESF)

nc

Actual282 (except

nationalexpenses linked

to ESF)

143 86 27 25 5116 (except national

expenses linked toESF)

23

% realization*** 83% 84% 73% 93% 83%Martinique (30/06/02)Planned* 621 330 166 89 67 8 210 81Revised** 714 344 179 89 68 8 nc ncActual 701 297 162 83 47 5 nc nc% realization*** 98% 86% 91% 93% 69% 63%

TOTAL FrancePlanned* 5005 2189 1193 525 431 40 1941 874Revised** 5117 ? 2267 1289 536 418 25Actual (paymentswithout Guyane) 4532 ? 1922 1048 504 351 18

% realization*** 85% 81% 94% 84% 72%nc : not communicatedSource : SPDs and regional authorities*according to the initial SPDs in 1994 M€**according to the ultimate version of the SPDs in current M€***actual expenditure compared to revised SPDs



4.2.4. Reasons for deviations from Plan

All the SPDs have been modified along the programming period, but the main modificationsoccurred at the end of the period, essentially to bring the initial schedule of payments closer tothe actual programme execution. Some minor strategic re-allocations also occurred.

The case of the fisheries sector can be underlined : in fact, cuts in the FIFG support havebeen operated in 1998 and 1999 in Corsica, Réunion, Guadeloupe and Guyane, and thedistribution of credits between measures and priorities has been revised in consequence. InGuadeloupe for instance, it was justified by a lack of project holders in an insufficientlystructured sector. Moreover, the auto-financing capacity of the beneficiaries was limited.Eventually, the programme of modernization of the fleet was launched lately, 7 months beforethe deadline for programming.

In Corsica, the main modification was the "de-programming" of 5 M€ from FIFG to ERDF :in 1999 indeed, the "worrying delays in the programming of investment operations and theinsufficient level of incurring" in the FIFG part of sub-programme 2 compelled the DRAM(Regional State Agency for Maritime Affairs) to implement the "de-programming" ofabandoned projects and unfinished works. On the other hand, the DRAM had to implement a"redeployment" of the FIFG facet, which was accepted by the Monitoring Committee on 7May 1999 : measure 2.3.5. (Promotion of sea products) was no longer funded as no projecthad been launched.

In Nord Pas de Calais, some minor changes occurred in the strategy, as for instance theaddition of a measure on Telecommunication and Information society in 1997, on thefinancial initiative of the regional Authority. Some adjustments of the programme alsooccurred, for it appeared that some measures were more successful than others : among thesuccessful measures was the support to mixed housing development zones (from 18 M€ of SFsupport initially to 20 M€), business real property (from 5,5 to 11 M€), or urbanrequalification (the initial programming was tripled)5. Some actions in this sector even had tobe re-planned in the period 2000-2006. In other respects, the funding forecasted for social andhealth measures (measure 5 of sub-programme IV : Alcoholism and drug addictionprevention) was partly transferred to other measures considering the lack of project holdersable to lead the projects. Regarding the funds, planning delays in the farm sector and a certainlack of dynamism lead to funds transfer : about 8 M€ from the EAGGF have been transferredto the ERDF (ending up in a total of 40 M€ for EAGGF after the last reprogramming).

In La Réunion, the SPD was the subject of a broad financial and technical reprogrammingexpressed in the Commission's C (2000) 1762 decision : this decision modified the fundsfinancial distribution (in particular, FIFG fundings were reduced by half, but the initialamount was rather weak).

(in M€) ERDF ESF EAGGF FIFG TOTAL

Initial SPD July 1994 320,2 183,0 149,0 7,5 659,7

Revised SPD 349,9 191,8 141,8 3,9 687,3

In La Réunion (as in the West Indies) the blockage of public grants which affected all theFrench national fishery sector in 1996, as a consequence of non respect of the MAGP (MultiAnnual Guidance Programme) objectives, led the fishery enterprises to drop their investmentsduring some years (1996-1998). In La Réunion, a main new component has been introduced

5 In the district of Valenciennes, this was due to the arrival of the automobile firm Toyota in 1997. The Japanese firmattracted other enterprises and investments in R&D.



in the programme in 1998, for the building of four new secondary colleges and theirequipment with technology facilities, as a complement to the existing support to high schools.This addition was due to the rapid growth of the young population in the island. Theprogramme had an accelerating effect on equipments that would have been necessary sooneror later. The education offer thus immediately reached a good level for the new generationsentering the educational system.

In Guadeloupe, in order to take into account the damages caused by "Luis" and "Marilyn"tropical storms in September and October 1995, a specific measure (called "Rebuild andimprove the basic infrastructures in the stricken towns of Guadeloupe") was registered in theframework of the reprogramming of the SPD in 1996.

4.3. Assessment of geographical spread

Population eligible under Objective 1 and initial EU budget (1994-1999)6

Population 1994 Obj. 1 allocation

(thousands) in % ofnational

population

in % ofObj.1

population

M€ in % oftotal

allocation

€ percapita

France 59 353 100,0 - - -

France Obj. 1 2 668 4,5 100,0 2 190 100,0 821

Corse 255 0,4 9,6 250 11,4 980

Hainaut 839 1,4 31,4 440 20,1 524

Réunion 642 1,1 24,1 660 30,1 1 028

Guadeloupe 411 0,7 15,4 345 15,8 839

Guyane 142 0,2 5,3 165 7,5 1 162

Martinique 379 0,6 14,2 330 15,1 871Source : INSEE, SPDs

The geographical spread shows that globally the Objective 1 regions received structural funds'support in proportion to their share of population among the total Objective 1 population inFrance. Two cases can be underlined though : the population of French Hainaut represented30% of the Objective 1 population, but the region was granted with 20% of the total ECcontribution. On contrary, La Réunion weighed 25% of the Objective 1 population butreceived 30% of the structural funds support in the framework of Objective 1. This analysis isbased on the respective share of population at the beginning of the programme; but regardingLa Réunion for example, at the end of the programme, the support only reached 930 € percapita.

Consequently, it appears that the geographical spread was not made considering only theshare of population, but also with economic situation concerns.

6 Source : SPDs 1994-1999, INSEE



4.4. Views of the ex ante and mid-term evaluators on appropriateness of the SPDsCorsicaThe mid-term evaluators analysed the level of coherence and relevance of the SPD accordingto three issues : coherence of the SPD with the initial diagnosis, identification of the financialamounts at stake, and analysis of the outputs and results indicators.

The evaluators outlined that the strategy pursued by the SPD was based mainly on thediagnosis and propositions of the PDC : the analysis of the qualitative diagnosis of the PDCenabled the evaluators to identify the development priorities of the SPD (regarding structuringequipments : improvement of the road network and protection of the environment; regardingthe productive function : tourism as it is the first source of income and employment in theisland; regarding the social function : increase the level of education).

The evaluators then put in perspective the priority sectors of development with the mainsectors of investment : this comparison showed that the financial allowances and theirrepartition among the strategic axes corresponded to the priorities identified in the SPD.

Eventually, the degree of "evaluability" of the SPD was analysed by the mid-term evaluators :they examined the relevance of the proposed indicators, classifying them between : relevant,to be completed, to be quantified, or too numerous.

HainautThe ex ante evaluation of the regional plan of development of the Hainaut was carried out inApril 1994. Globally, the ex ante evaluators underlined that through the propositions ofactions and forecasted measures, the regional development strategy was not precise enough,especially regarding the economic sectors that needed to be strengthened, qualified, ordiversified.

Regarding the three main axes of the programme (economic development, human resourcesand living environment), they were considered as logical and relevant, but far too global so asto state a strategy of development. The complexity of the presentation of the measures bypriority axes was harmful to the good comprehension of the development plan. The evaluationthen proposed a redefinition of the objectives of the SPD.

According to the mid-term evaluation (in November 1997), the four axes of the strategy(support and stimulation of the economic activity, strengthening of the R&D and technologypotential, enhancement of human resources, and territorial requalification) seemed to havebeen drawn in a concern of realism, without stating unrealistic ambitions for the living forcesof the territory. The subconsequent measures are largely coherent with those objectives. Theevaluators especially underlined the following points :

- wide means granted to support productive investments, as well as services to SMEs;- qualitative improvement of enterprise buildings (infrastructures d'accueil);- implementation of vocational training actions for the enterprises;- support to craft and micro-projects;- will to develop the tourist promotion and accommodation infrastructures.

Some weak points were also underlined in the mid-term evaluation :- the limited support to enterprise creation;- allowances to support the objective of industrial diversification were badly defined;- the development of market services linked to industry did non receive specific support;



- funds granted to tourist and cultural enhancement were largely dedicated to thecreation of large public equipments creating few added value and jobs;

- eventually, the evaluators assumed that one could wonder about the effectiveness ofthe support devices implemented in order to support craft activities and micro-projects.

La RéunionAccording to the ex ante evaluation of 1993, "it was logical that the priorities selected in theregional development plan aimed at reducing the handicaps of remoteness (airportoperations), strengthening and diversifying the productive sectors (especially agriculture,agribusiness and tourism), strengthening the infrastructures of support to economic activitiesand continuing the training effort". Among these priorities, the evaluators had noticed a strongincrease of support to the development of productive sectors generating employment : thisstress was justified by the persistence of an especially high unemployment rate. On the otherhand, a strong effort was also dedicated to the protection and enhancement of environment, inconformity with the orientations of the structural funds regulations of 1993.

The ex ante appraisal of the development strategy (and its priorities) presented in the regionaldevelopment plan, as it has been conducted by the Commission services with the help ofindependent evaluators, enabled to consider that this strategy was relevant and correspondedto the main problems of development of La Réunion. It is then in function of this strategy thatthe axes and measures of the programme have been defined.

4.5. Our conclusions on appropriatenessGlobally, the strategies adopted in the different regions appear to us as adapted to social andeconomic context of each region in 1994. This assumption is based on our interviews withstakeholders and on the review of relevant literature and ex ante evaluation reports.

As regards the general structural funds distribution, between one third and half of theObjective 1 programmes for 1994-1999 were directed to support the development ofeconomic activities (i.e. enterprises), and about 20% to support human resourcesdevelopment. This corresponded to the main needs of the Objective 1 regions that globallysuffered from high unemployment rates and pronounced dependence on national publictransfers and exchanges.

The following paragraphs summarize the opinion of the country experts on theappropriateness of strategies adopted in comparison with the 1994 diagnosis in each region.

CORSICAFor the representatives of the State and the Region (territorial authority) the drawingup of the programme was facilitated by the preliminary reflections on theDevelopment Plan for Corsica (PDC, Plan de Développement de la Corse) in 1992and 1993. Globally the strategy for the use of structural funds has not changed in fiveyears, since it was based on a long-term thought (15-20 years). Although thestructuring function of the infrastructures was put forward to facilitate the productivefunctions of tourism and industry, in 1994 the credits reserved for basic



infrastructures did not seem, in the opinion of the country experts, to match theeconomic ambition (for example only 20 km of roads in six years). Today, this resultstill let a great dissatisfaction in terms of traffic facilities and water supply safety.

The PDC, prepared before the SPD, has certainly led to a certain hierarchicalorganization of priorities. However, this plan had not yet come with a spatialdevelopment scheme allowing to localize these priorities. The result of this is acertain dispersal of efforts.

Eventually, the diagnosis in 1994 had noticed the weakness of entrepreneurial spiritin the productive sector. This weakness also existed on the professional organisationslevel. As for local authorities (municipalities and departments), projects managers anddevelopment leaders were also lacking. More than in other regions, a support andtraining programme for projects holders would have been necessary. Apart from thosereserves, the programme was coherent with the identified priorities and resulted froma good level of consensus between partners, especially between the State and theTerritorial Authority of Corsica.

FRENCH HAINAUTThe choices made in the SPD corresponded to the economic needs of the area : in1994, 34% of employment in the area was in the industrial sector (vs. 30% asEuropean average). The regional economy was traditionally based on coal, and theNord Pas-de-Calais region had remained a fragile industrial region : the economicconversion of the region in the 80s had been based upon more recent industries(automobile and railway equipment).

Transports were thus a key main line for the re-qualification of the territory, andentered a period of technological mutation and better productivity.

The programme seems to have been appropriate to strengthen these aspects ofeconomic development.

REUNIONThe preliminary diagnosis stated in 1994 well puts in evidence the structuraldifficulties of La Réunion (demographic growth, weakness of the regional market,distance from the European continental markets). The efforts made to "catch up" thelevel in terms of basic equipments (harbour, airport, roads, education facilities, publicequipments …) as well as in terms of rise of qualifications, partially answer thissituation.

However the objective of economic opening up of Reunion towards Europe and theIndian Ocean has not been the subject of an in depth analysis of the potentialopportunities in 1994. What were the comparative advantages with regard to thenearby States (Mauritius, Madagascar, South Africa) ? What role could play LaReunion in the exchanges between Europe and these countries ?



GUADELOUPEThe environmental sector (drinking water, purification, waste treatment) explicitlyappears as having priority in the SPD : indeed it was necessary to "catch up" the delayin this sector.

The programme, by finalizing the large projects of infrastructures that had beganunder the previous periods of programming (Northern Airport large project forexample), was relevant regarding the need of continuance and opening up of theisland.

Almost half of the forecasted financing concerns the search for economic balances : itcorresponds to the need of improvement of the productive environment of enterprises.The strategy of the SPD in direction of the modernization of business and craft wasalso a good answer to the particular needs of these sectors, even if one would havewished a bigger attention carried upon accompanying and animating these measures.

GUYANEAccording to the intermediate evaluation of the Objective 1 programme, the logic ofintervention of the SPD corresponded well to the stakes and ways of catching upidentified in Guyane in 1994. Indeed, the region faced a certain slowing down ofgrowth in 1992, and a persistence of delays and handicaps (remoteness, weak privateinitiative, still under-qualified local workforce, unemployment rate reaching near thedouble of the national average).

The essential stake was indeed "to generate an economic development allowing tocatch up the level of the most developed regions and to absorb a workforce incontinuous growth".

The programme had mainly a vocation of opening up : in a region where thedevelopment still went through the realization of infrastructures and the upgrade ofpublic utilities, this programme seemed convenient and adapted to the needs of theterritory.

MARTINIQUEThe SPD does not clearly indicates the key-sectors of the strategy, unless if wecompare the amounts dedicated to each measure.

It appears then that the programme was relevant, by the financial weight grantednotably to a farming sector dominated by the traditional cultures, which had difficultyin diversifying, and widely dependent on the preservation of protections and subsidiesindispensable to its survival (contingents and guaranteed prices).

Besides, a little more than a quarter of the financing of the programme went to thesector of the human resources, what corresponded well to the social difficulties of theisland, among them the problem of the level of unemployment (from two to threetimes superior to that of the mainland). To this, could be added an important numberof beneficiaries of the RMI (Revenu Minimum d'Insertion : Minimum InsertionIncome) and the beneficiaries of helped contracts or insertion devices.



Answers to key questions on appropriateness

1. What were the key issues identified at a national (or regional) level in 1994 ?In Corsica, the statement in 1994 was of a low density of population, a lack ofentrepreneurship spirit, an obsolete road network, an under-qualification of the workingpopulation, a family size agriculture that hardly answered to the local market demand.In Hainaut, upon the statement of a fragile industrial economy, a strong disruption of thesocial structure, but a high growth potential around the network of SMEs, priority had beengiven to the territorial reorganisation and requalification in a double perspective ofrehabilitation of the area's attractiveness and creation of economic activities.In 1994, the 4 overseas departments (Réunion, Guadeloupe, Guyane and Martinique)presented rather similar characteristics (with different intensities) : a low secondaryproductive sector, a local economy mainly based on the public tertiary sector and socialtransfers, a high demographic growth increasing the unemployment each year, lack oftraining infrastructures.

2. What choices were made in the approach taken to delivering the development objectivesof the CSF? i.e. how did the CSF (or SPD) propose to tackle these issues?The 6 Objective 1 regions gave priority to two main objectives : development of economicactivity in the private sector, and improvement of the qualifications of the population.Secondary objectives were present in all regional strategies, as territorial balance andenvironmental protection, or external opening up of the territories.

3. What was the intervention intended to tackle :

Constraints on growth : for the two continental regions (Nord Pas de Calais and Corsica), themain preoccupation was indeed to participate in the national growth, given the migratoryimbalance, the weakness of attractiveness for the active population, and the weakness ofqualifications that are slowing down growth.

Concerns of market failure : in the DOMs, the programmes interventions were intended totackle the difficulty of these regions in taking part in the international exchanges. Eventourism has difficulties in taking a position within a developing market.

4. Was the approach adopted in 1994 appropriate and relevant to national (or regional)circumstances ? (Such as the mix of programmes and the balance of resources).

The approach adopted in 1994 was appropriate to regional circumstances. The mix ofEuropean funds was globally positive : as regards ESF and ERDF, the support to vocationaltraining indeed reinforces the attractiveness of the region so as to draw new enterprises. Asfor EAGGF and ERDF, the support to heavy water providing infrastructures (ERDF)corresponded to the objectives of production development, balanced territorial distributionand environment protection of the EAGGF.Fund mixing reinforces the complementarities between the objectives.

5. To what extent were individual programmes appropriate to tackling identified needs?See regional analysis (§ 4.5.)

6. To what extent did the implementation of the strategy differ from that initially proposed?All the SPDs have been modified along the programming period, but the main modificationsoccurred at the end of the period, essentially to bring the initial schedule of payments closerto the actual programme execution. Some minor strategic re-allocations also occurred.



7. Were any changes:The result of strategic decision making (reacting to changing circumstances for example)?The result of unforeseen problems in implementing the planned strategy (such asabsorption problems)?Unplanned (i.e. the strategy itself was not amended)?

Changes were mainly due to absorption problems for some measures.

8. How did the national/regional economic and social situation evolve during theprogramme period?From years 1994-1995, the French economy has taken up again growth rates comparable tothose of the late 1980s. Simultaneously, unemployment has strongly decreased from summer1997 (in March 2000, the national rate of unemployment was equivalent to the one of 1992,i.e. 10% of the active population).

9. Are any factors identifiable that supported or hindered the adoption and implementationof appropriate programmes ?

� Institutional factors that supported the adoption and implementation of appropriateprogrammes :

- decentralization of competences in terms of vocational training to the regionalauthorities (Conseils Régionaux) in 1993 (see end of § 4.1.),

- complementarities with the "Contrats de Plan Etat-Région" that are settled on the samecalendar (multi-annual programming), based on the same regional strategy, andmanaged by the same services (SGAR7),

- economic and social debate, especially in Corsica with the PDC adopted in 1993, and inLa Réunion with the Active Development Plan (PDA) adopted in 1992,

- previous experience of developing strategies was a positive influence on the SPD inNord Pas de Calais especially,

- existence of agencies dedicated to development functions.

� Institutional factors that hindered the adoption and implementation of appropriateprogrammes :

- weakness of the evaluation process in most of the regions, and consequently lack ofindicators for monitoring that sometimes prevented the managing authorities fromidentifying challenges facing the implementation of the programmes (it preventedstrategic re-allocations).

- problems of the fisheries sector : see below § 5.2.7.- position of some development agencies or trade and craft chambers : while the existence

of such agencies or the implication of the socio-economic world facilitated the adoptionof appropriate strategies in some regions, in others it also limited the strategic discussionswhen the European programme was the main activity of these agencies or their mainsource of funding.

� Socio-economic factor at national level that supported the adoption and implementation ofappropriate programmes : national growth since 1994 : see above, end of § 4.1. The SPDsadjusted appropriately to economic growth, but this growth might have slowed thestrategic debates.

7 The SGAR, Secrétariat Général aux Affaires Régionales, is the managing unit in charge of the European Programmeswithin the Préfecture



5. EFFECTIVENESS

This chapter is based on the analysis in the regions Corsica, Nord Pas de Calais (Hainaut) andLa Réunion. These three SPDs were selected by ECOTEC Research and Consulting inconsultation with DG Regio of the European Commission.

Section 5.1. examines the outputs and results of the programmes; section 5.2. discusses widereffects of the programme and its effects on thematic priorities, and by fund; section 5.3.assesses the Community Added Value; section 5.4. discusses the changes to policy andpractice; eventually, section 5.5. gives the conclusions on effectiveness.

5.1. Programme outputs and results

5.1.1. Processing the indicators

Quantification of objectives and targets by indicatorsIn 1993 in France, only few regions (eligible for Objective 1 or 2) had had a first experiencein terms of evaluation. During the preparation of the 1994-1999 SPDs, some indicators hadbeen selected, but very rarely quantified.

Generally speaking, the initial SPDs were relatively little quantified as for their objectives ofoutputs and results. Most of the time there were only qualitative goals. When there werequantified goals, they were context ones, as total employment growth expected, or increase ofthe GDP per capita. SPD level indicators were by their nature impact indicators (contextrather than programme as they applied to the entire population rather than just to thepopulation that directly benefited from the programme).

The extent to which targets were set for the indicators depends strongly on the regions. Forexample the Corsican SPD had set indicator targets for almost each measure and sub-measure.In French Hainaut, the SPD had set almost no target at the measure level. In La Réunion,some target indicators existed as for rural development, SMEs and tourism essentially. As aconsequence, the evaluation of the effectiveness can not always be made with regard to initialobjectives.

Moreover, the mid-term evaluations had sometimes identified relevant indicators, that laterwere not quantified as for the outputs.

View of the mid-term evaluations on indicators

CorsicaThe mid-term evaluation mentioned different types of indicators. The SPDs contained :

- global objectives at a socio-economic and structural level,- specific objectives for each sub-programme,- and specific objectives by measure (most of the outputs and results indicators here

were quantified).



Nonetheless, several improvements were necessary according to the evaluators :- the data collecting system on physical realisations had to become effective,- project level indicators had to correspond to measure level indicators so as to enable

monitoring of data,- results indicators had to become much more precise, especially regarding tourism,

culture, building heritage (bâti), and research.

HainautAccording to the mid-term evaluators, the quantification of objectives too often consisted inthe definition of indicators whose initial value was not quantified. The analysis of objectivesfor each measure showed that about half of these measures were not accompanied by aphysical quantification of outputs forecasted, and that about 2/3 of them did not give anestimation of expected results. The evaluators thought that for some types of interventions (asvocational training, or setting up of young farmers for example), this lack of indicators wouldreveal harmful.The evaluators concluded saying that on their point of view, a precise evaluation of the resultsand impacts of the policies implemented would turn out to be rather problematic.

RéunionThe mid-term evaluator built an original methodology so as to establish a typology of theprogramme measures, according to 3 criteria : a criteria of implementation (level of financialconsumption or physical realisation), a criteria of monitoring (quality of the monitoringsystem, assessed in function of the ability to give evaluation indicators), and a criteria ofimpact (depending on the existence of the elements needed for the assessment of impact, i.e.existence of precise objectives, and existence of quantified goals).The mid-term evaluator believed that only few measures answered to the three criteria andhence that the possibility to give an appraisal of effectiveness would be very difficult if therewas not a shift in the programme monitoring habits. They gave at that time a lot ofrecommendations to enhance the monitoring process' capacity to provide quantifiedindicators.

Ex post quantification of the indicators

The following tables give the results of our researches region by region for the core indicatorsretained in the methodology guide or for some others more relevant for the region'sspecificity. The first column has been filled up with the figures of the ex ante objectives whenthey were available in the SPD. It appears that a lot of the objective targets were not definedat the moment of the SPD approval. Outputs and results have been quantified on the basis ofthe region's Objective 1 final reports when available (it is only the case of La Réunion), on thebasis of the ex ante evaluation included in the 2000-2006 SPD, or on the basis of our owninvestigation through data mining in the few information available in the monitoring systemor by interviews of the programme managers, project holders or final beneficiaries.

The coherence of data has been checked by ourselves after examination by the regionalagency in charge of monitoring. When it was impossible for us to assess the outputs we put"nk" for unknown.

Comments on these results are given in § 5.2.2. Effects on thematic priorities.



5.1.2. Regional tables

CORSICA

ThematicPriorities

Core Indicators Targets(SPD)

Outputs° Results Sources

EmploymentDirect jobs created nd - 1030 Estimation by

Reverdy Associés(see § 7.3.)

Jobs safeguarded nd nkTransport infrastructures

Nb of road km 20 20 - DRETime gained on Ajaccio-Bastia 30 min.8 9 min. DRE

Mobilization of water resourceIncrease in the stocking capacity in M m3 11,5 8,5 DRAFin % of the existing volume in 94 30% 22% DRAF

EnvironmentWater purification capacity in populationequivalent

180 000 120 000 SPD 2000-2006

New purification plants 3 à 4 0 SPD 2000-2006R & D Universities

Increase in the university surface 80% 8500 m²Production of wind energy 5 M

kwh/annk

SMEs (industry)Tangible Investments :Nb of SMEs supported 100 82 DRIRENb of projects 120 105 DRIRENb of jobs created in those SMEs nd - 151 DRIREAverage Investment nd 0,34 M€ DRIREIntangible Investments:Nb of SMEs supported (FRAC, FRATT) 200 38 DRIRENb of studies carried out 30 to 50 22 DRIRENb of services networks created nd 1 "Creation of structures of financialengineering

1 1 "

SMEs (tourism)Modernization of hotels 100

(20% ofthe park)

117 3640modernizedbedrooms

(9100 beds)

DRT

8 Objective exposed but concerning the total programme which will be achieved only in 2015.



ThematicPriorities

Core Indicators Targets(SPD)

Outputs° Results Sources

Modernization of tourism residence nd 19 3223 bedsModernized camp sites nd 35 2250 places

concernedcreation of character hotels 4 0creation of self-catering holidayaccommodation

100 100

"Contrats de station" or "pays d'accueil"("resort contract" or "welcoming area")

nd 10

DRT

Rural developmentnb of farm holdings modernised nd 606new irrigated surfaces in ha 2150 2300diversification of fruit arboriculture (ha) 1100 400wine-producing restructuring (ha) 1900 1465nb of ha of forests cleared 1300 115nb of ha reafforested 250 254nb of specific small agribusiness unitshelped

30 to 40 47

SPD 2000-2006

Human resourcesNb of beneficiaries nd 40 048 SPD 2000-2006Job seekers nd 24 028 Estimated to 60%Young under 25 nd 17 306 SPD 2000-2006

nd: not defined; nk: not known

Target indicators had been quite well quantified in the initial SPDs at measure level.

- It is then possible to check that the output objectives have been achieved in terms of roads(20 kms of renovated roads), even if the results are not at the expected level (time gained).The objectives have globally been achieved in terms of mobilization of water resources,purification capacity, support to SMEs for material investments (80 SMEs supportedcompared to an objective of 100), or tourism.

- The objectives were more difficult to achieve in terms of intangible support to SMEs orwaste treatment.

NORD PAS DE CALAIS

Core Indicators (when available) Targets(SPD)

Outputs Results Sources

EmploymentDirect jobs created (gross) nd - 3220Jobs safeguarded (gross) nd - 7000

DRIREand SPD

2000-2006





Transport infrastructuresNb of renovated road (km) n.d. n.k. DRETime gained 50'

betweenAvesnes &Valencienn

es

n.k. DRE

Nb of renovated railroad (km) nd n.k. DRENb of train stations renovated nd 16 SPD 2000-

2006Services improvement (nb of stations) nd 13 SPD 2000-

2006Time gained 20'

betweenValencienn

es &Maubeuge

n.k. DRE

EnvironmentPollution Prevention9 (ADEME) n.d. 65 projects - substitution of

171000 Mwh perannum of networkclassical energies- sorting andrecycling of 162000 t per annum offirms waste (50 %of DIB recycled)- air quality : less than 1504 t perannum of COV …- 119 direct jobscreated

SPD 2000-2006

Development and maintenance ofwater streams

n.d. 30

Nb of redeveloped hectares (industrialfallows)

n.d. 2020

Nb of rehabilitated m²demolished m²

n.d. 191 000450 000

SPD 2000-2006

SMEs (industry)R&D aids Nb of SMEs supported (FRATT,

ATOUT)nd 39 DRIRE

All aids butR&D

Nb of SMEs helped 250 69 DRIRE

All SMEs Nb of jobs created in those SMEs 3000 - 1400 SPD 2000-2006

Nb of collective actions 27 DRIRENb of companies participating tothose collective actions

1000 - 1500 DRIRE

Support to structures of financialengineering

nd 4 SPD 2000-2006

9 Energy control, industrial waste, air quality and liquid effluents of the process





N° of enterprises supported in theirdevelopment through financialengineering structures

130 - n.k.

Big companies10

Nb of companies helped nd 30 DRIRENb of jobs created in those companies 3000 1821+ potential of

520 more CDIDRIRE

Nb of jobs maintained nd 7191 DRIRERural development

Nb of farm holdings modernised nd 1500Nb of farm holdings introducingdiverse activities

nd 40

Nb of farm holdings introducinginvestments with environmental aims

nd 400

Reafforestation + 1000ha

+ 636 ha

Nb of projects on modernisation of theprocessing and marketing capacity(farm produce industry)

nd 33

Setting up of young farmers nd

DRAF

Nb of ha drained nd 3500Villages renovation nd 300 files 131 cities and

102 000 inhabitantsconcerned

SPD 2000-2006

Human resources development

Nb of beneficiaries : total nd 81 500- in employment nd 18 000- unemployed nd 44 500

- in school nd 19 000- Women nd nk

Nb of enterprises helped forvocational training

nd nk

SPD 2000-2006


The lack of quantification of the objective indicators makes it difficult to analyse theeffectiveness with regard to initial objectives.

10 helped through FSI (Fonds Spécial d'Implantation), State aid notified to the European Commission



REUNION

Thematicpriorities

Indicators Targets(SPD)

Outputs Results Sources orcomments

EmploymentDirect jobs created nd - 2950 Estimation by

Reverdy Associés(see § 7.3.)

No. of jobs saved nd - nkTransport infrastructure

No of new dual carriageways 5 km 3 km See evaluation ofefficiency

No of km of roads renovated 1,5 km 1,5 kmReserved lane public transport nd 5,5 km

Mobilisation of water resourcesIncrease in hill lake storage capacity(million m3)Tunnel for water transfer

nd

2

0,5

1

Final reportEAGGF

EnvironmentWater treatment capacity inpopulation equivalents

nd nk

New purification plants nd 4 Final reportERDF

R & D UniversitiesNo indicator

SME (industry)Tangible investmentsNo. of SMEs helped 60 250No. of groups of craftsmen helped 10 nkNo. of craftsmen 400 250No. of projectsNo. of jobs created by thesebusinesses

nd nk

Average investment nd 1,6 MFNo. of ha of business parks 200 30

Final reportERDF

Intangible investmentsNo. of studies carried out 900 220 Final report

ERDFNo. of service networks createdCreation of financial engineeringstructure

1 1 Final reportERDF

SME (tourism)Modernization of hotels or touristresidences

250rooms

15 units 471rooms

Final reportERDF

Camp sites modernised nd 0



Thematicpriorities

Indicators Targets(SPD)

Outputs Results Sources orcomments

Creation of new hotels 1000rooms

10 units 686rooms

Final reportERDF

Creation of self-catering homes nd 0"Contrats de station" or "paysd'accueil" ("resort contract" or"welcoming rural district")

nd 0 Funded in REGIS

Rural developmentSetting up of young farmers nd 421No. of farm holdings modernised 100 242New areas irrigated (ha) 4400 2700Diversification of fruit arboriculture(ha)

1200 1254

Forests cleared (ha) 300 740Reafforestation (ha) 330 306No. of specific small food productionunits helped

25 79

No. of new units created nd 30

Final reportEAGGF

Development of fisheries sectorFishing fleet N° of modernised vessels nd 75

Fishing capacity modernised nd 5585 kWN° of fishermen benefiting frominvestment aid

nd 220

Aquaculture N° of handling facilities in fishingports

nd 3

Fishing port facilities modernised nd 1Increase in processing capacity nd 447 t/yearN° of processing units modernised nd 2N° of promotion campaigns nd 1Increase in processing capacity nd 30 t/year

Global fisheriessector

Jobs subsequently safeguarded nd - 100

Direct jobs created nd - 20

Final report FIFG

Human resources developmentNo. of beneficiaries nd 109 147

- wage-earners nd 10 721

- job seekers nd 60 338

- long term job seekers nd 19 811

- youth under 25 nd 63 619

- women nd 31 385

No. of enterprises helped forvocational training

nd 71

Final report ESF




The objective indicators were unevenly quantified. However, we can make the followingcomments :

- In terms of road infrastructure, the objectives were globally achieved. The objectives interms of supported SMEs were widely exceeded (250 SMEs supported for materialinvestments, compared to 60 initially forecasted), as well as in terms of modernisation ofagricultural holdings, clearance of forests, or support to small agribusiness units.

- On the other hand, objectives were more difficult to achieve in terms of support to intangibleinvestments of SMEs, or craft support.

5.1.3. Main results to date achieved by fund (for the three regions Corsica, Hainaut,Réunion)

No target indicators had been defined by fund at the beginning. These results have beenaggregated when common indicators existed.

Thematic priorities Indicators OutputsERDFEmployment Direct jobs created 7200

Transport Km of new road 23

Water mobilization Increase of storage 9 M m3

SMEs industry N° of SMEs supported 587

SMEs tourism N° of SMEs supported 296

ESF

Total n° of beneficiaries 230 695

- among which Job seekers 128 866


- among which Youth 99 925EAGGF

N° of farm holdings modernised 2348N° of ha drained (NPC) 3500N° of ha irrigated 5000N° of ha reafforested 1196

Rural development

N° of agri-businesses supported (existing and new) 189

5.2. Programme effects5.2.1. Programme contribution to overall social and economic changes

Verystrong

Strong Adequate Weak Evidence

Innovation and R&D X Except for French Hainaut andpartly Corsica. The overseasregions are often out of the researchexchanges. Actions in this sectorhave been taken into account in theframework of REGIS in Réunion.



Verystrong

Strong Adequate Weak Evidence

Skills development X Strong efforts have been made interms of education and vocationaltraining to "catch up" with thenational levels of qualification.

Overcoming territorialimbalance

X The global effects are still difficultto assess. In La Réunion, the policyof territorial planning of thehighlands enabled to stop thepeople drift from the land in themost enclosed territories.

Rural diversification X Development of specific products,diversification through ruraltourism in Corsica and Réunion.More difficulties in the otherDOMs

Infrastructure development X Especially in the DOMs withairports, ports, educationalbuildings…

Supporting SMEs X The effects were stronger inRéunion, or Hainaut than in theWest Indies where the productivesector had difficulty in holdingdevelopment projects.

Improving environmentalinfrastructure

X Depends upon the regions : inCorsica and La Réunion, there weredelays in carrying out theprogrammes, although WasteTreatment Plans have beenelaborated.

Improving energyinfrastructure

X It was not part of the priorityobjectives of the programmes.

Improving renewable energyinfrastructure and resourceefficiency

X Attempts have been done in termsof photo voltaic energy in Corsicaand La Réunion (and wind farms inLa Désirade, Guadeloupe).Use of the "bagasses" (waste ofsugar refineries) by dual powerplants in La Réunion.

Contribution to urbanregeneration

X Especially in French Hainaut,where heavy investments weremade in the requalification ofindustrial fallow lands.

Modernising the fishing sector X Difficulties have been encounteredwith European limitations.

Supporting IT Society X Not a priority within the Objective1 programmes.See programme Regis II in theDOMs.



5.2.2. Effects on thematic priorities

For both regions of Corsica and La Réunion, we have been able to re-establish the maincomponents of the programmes according to the revised version of the SPDs (afterreprogramming) :

Corsica - Programme distribution per objective (in % of total initial cost)

Improvement of

qualifications

13%

External opening up

of territories

22%


ntal protection

13%Dvlpt of

economic activities

52%

Corsica - Programme distribution per objective (in % of revised progr. total)

External opening up

of territories

22%


49%

Improvement of

qualifications

18%


ntal protection

11%

Réunion - Programme distribution per objective (in % of total initial cost)

Improvement of

qualifications

22%


ntal protection

29%

External opening up

of territories

15%


34%

Réunion - Programme distribution per objective (in % of revised progr. total)


21%

External opening up

of territories

11%

Improvement of

qualifications

25%


ntal protection

43%

Source : Reverdy Associés, from the initial and revised SPDs

These pie charts show that the thematic composition of the programme has not changed muchin Corsica, whilst in La Réunion, the programme eventually focused on actions aiming atterritorial balance and environmental protection (environment; agricultural and ruraldevelopment), rather than on the development of economic activities.



The following paragraphs give our appraisal of the effectiveness according to thematicpriorities. For more details, please see extracts of the regional case studies in Annex 4.

• TransportsThe main contribution to the islands bringing closer to the continent (and thus to theconvergence of these regions) came from the air transport infrastructure development.

• RoadThe effectiveness of the programme was heterogeneous in terms of roads:

- In the French Hainaut, the realisations were late : Maubeuge's road diversion still is torealise, and the RN2 (National Road) was not reorganized.

- In Corsica, the programme suffered major delays. These can be explained by delays interms of files preparation, technical studies, land acquisitions, but also by the lack ofresources of the Corsican enterprises that must realise the works. The decision andmanagement of works now belong to the Territorial Authority of Corsica which isendowed with specific means. But at that rate, the exceptional road investment planshould be realised in fifteen or twenty years and it will still leave the local road networksin poor condition. If it seems possible, within the framework of the exceptional plan ofinvestment (PEI) to mobilize faster financing, there will still remain to endow means ofexpertise and engineering at the level of the local authority, in order to have projectsready a long time in advance.

- In La Réunion, the works forecasted for the southern Boulevard of Saint Denis have notbeen completed yet. (See efficiency case study in Annex).

• RailAs regards the railway sector, only the Nord Pas de Calais region and Corsica (to a lowerextent) are concerned : the other regions (especially because of their insularity) do not benefitfrom a railway network.In Corsica, the railway was not subject to investments during this period in spite of its badstate, and in spite of the fact that it should have been a more sustainable alternative means oftransport.

• AirportIn La Réunion, the extension of the passenger air terminal allowed to have an extensive use ofthe new runway that had been extended in the previous programme. The passenger traffic hasincreased by 20% over the period, but the airport is now ready to accommodate twice thepresent flow. This is an important condition for the development of the economy.In Corsica too, the extension of the air terminals of Ajaccio, Bastia, Calvi and Figari has beencontinued.

• PortIn Corsica, the port infrastructure had been essentially taken care of during the previousprogramme. The improvements focused on fast ships capacity of reception.



Key questions in the field of transportsHow effectively did the Objective 1 programmes tackle key priorities in the field of transport ?

1. To what extent has this contributed to the development or convergence of the regionsconcerned ?The projects (airports and ports) contributed to the convergence of the regions (Corsicaand DOMs) by bringing them closer to the European continent and thus contributed totheir economic development. Given insularity, these infrastructures were the prerequisiteto any policy of development and territorial continuity.

2. How far has the investment in basic infrastructure - especially transport - contributedto economic development ?Investment in basic infrastructure facilitated exchanges with the European markets. Thisis true for both imports from and exports to Corsica, as there is a specific national policyto support the cost of transportation between the continent and the isle (policy of"continuité territoriale"). It is not the same in La Réunion where the port and airportfacilities participate to the growth of imports of goods, and for a small part to the exportof agriculture and food products.Road investments in Corsica and in La Réunion enable local markets to integrate withinthe larger market better, by reducing the costs and the time of transport between theproducers and the consumers. In Corsica, the main road developed by the programme isbetween Ajaccio and Bastia, two major urban areas with more than 50% of the island'spopulation. In La Réunion, the Southern Boulevard of St Denis is part of the coastal roadnetwork, joining all the towns of the region and especially the two activity areassurrounding the city of Saint Denis : the airport area in the east and the harbours of LePort and La Possession in the west.

3. Have the benefits of this investment been distributed evenly or unevenly(geographically or by economic sector) ?The benefits of transport investments have largely benefited the manufacturing andtourist sectors, but have benefited all the different sectors of the economy in a globalway.

4. To what extent has investment supported the establishment or development of trans-European networks ?Part of the road network crossing Corsica has been designed as trans-European (withlinks to Sardinia). But this link was not a priority in the 1994-1999 outputs.

5. To what extent have transport and communication improvements improved livingconditions (through improved accessibility) ?Road investments in NPC, Corsica and Reunion improved accessibility to the variousareas of these regions, allowing economic exchanges within the regions and also betteraccess to job opportunities.

6. What are the reasons for some programmes having substantially higher expenditureon road infrastructure than initially estimated ?The amounts devoted to road infrastructure did not exceed the initial estimated budget.Sometimes the unit cost was higher than scheduled due to later modifications.

7. What effect has the investment in transport networks had on the environment ?One of the investments is related to public transportation, a mode of transport which is toeco friendly.As regards landscape integration and natural resource protection most of the projects



have been studied carefully. This is especially the case of Boulevard Sud in St Denis LaRéunion, which has been designed as an integrated urban way (with cycle tracks andpedestrian corridors).

8. What impact have transport improvements had on efficiency and competitiveness ?In Corsica and La Réunion transport investment was a prerequisite to increase thecompetitiveness of the local economy.

• ICTIn Corsica, a core of ICT companies settled down in Bastia, showing the will of the island totake its part in the field of innovation. These companies settled in the FUTURA technopolewhich was partly financed by the ERDF. FUTURA has since become an incubator supportedby the Ministry of Research. Five firms were created in the following fields : synthesisimagery, motion-image cartoons, industrial design, online magazine softwares; another twoare calling centres in the field of tourism and software hotlines. By the end of 2002, thesefirms totalled a number of 70 employees. This shows how a region, however secluded, canencourage the creation of ICT activities.The main outputs were reached in the framework of the call for projects launched by theregional development agency (ADEC) within the "complementary" community initiative PICSMEs. However, Corsica suffers from the insufficient providing of "fast connect" (haut débit)services outside the urban centres of Bastia and Ajaccio which mainly drive the attention ofthe private operators. This focusing prevents the spreading of new activities over a greaterpart of the territory11.

The case of the Nord Pas de Calais region is particularly interesting in this sector. Initially,the French Hainaut SPD had not foreseen specific support to the sector of new technologies.One measure was added to the SPD in 1997 on the initiative of the Region, and allowed thesupport of the creation of the Digital images Pole in Valenciennes, as well as propertyprogrammes around the sector of the ICTs. Some representatives underline that thedevelopment of a digital pole in Valenciennes allows not to "lock" the zone into both keysectors that are the motorcar and the railway. ICTs develop gradually in the regionaleconomy, but the offer still remains concentrated and is not distributed in a homogeneous wayover the territory. So, when resorting to an indicator of specificity (ratio of the employmentgenerated by ICTs to the whole regional employment, and ratio of the employment of theICTs to the whole national employment, excepting Paris region), the employment zone ofLille largely stands out, whereas the Objective 1 area stays below the regional average.

In La Réunion, support to ICT facilities was essentially provided within the REGIS IIprogramme.

• SMEs in manufacturing sectorIn this sector, the Objective 1 programme did not have the same effects if we talk of theEuropean continent or of the overseas departments :

- In Corsica, the actions of support to material or intangible investment seem to have"woken" the entrepreneurial spirit and both cities of Bastia and Ajaccio have developed 11 The example of Vercors Connect and the "télé-travail" centre established in the Vercors Massif might inspiresimilar projects in the highlands of Corsica.



industrial parks and built incubators (pépinières) or enterprises buildings in order to welcomebusiness creations. About 110 SMEs (rather small ones) were helped, with an average 11-people staff per enterprise. These enterprises mainly came from the following sectors : foodprocessing industry (24%), printing – publishing (14%), wood processing (12%), metalprocessing (10%), and construction (9%). The average investment is rather weak : about 260K€ per enterprise. The development of the University and the actions in favour of the rise ofqualifications were favourable elements also for SMEs' competitiveness. In 1999, the ERDFalso granted 1 MF (about 150 K€) to the risk-capital company created by the local authoritiesin order to participate in the equity capital of developing firms or new firms. The actionsfinanced in this framework during the three years of the agreement were limited to threeacquisitions of holdings in an enterprise of drinks, another of construction and equipment, andanother of cooked meals (plats cuisinés). The small number of projects shows the weakness ofthe enterprises in terms of investment.

- In the French Hainaut, if the programme worked well as regards the support to SMEs, it isessentially because the Objective 1 area was abundantly endowed with regard to the needs interms of support for the industry. The support of the structural funds allowed to get projects inzones with strong unemployment rate.

- In La Réunion, 300 individual industrial projects and 250 collective actions in the sector ofhandicraft have been helped by the programme. These figures are high, taking into accountthat only 180 firms are higher than 10 employees in the island. Firms have largely takenadvantage of the programme funds to invest and to raise their competitiveness, especially asthey were combined with significant tax breaks for overseas departments. Nevertheless, localproduction still had difficulties in becoming integrated into European or international trade.Collective actions towards exportation have been conducted in the food-industry sector, withsuccess for some products in Europe. Firms have used the possibility of grants to share anexport manager.At the end of the programme, orientations were taken so as to direct the helps of the SPDtowards immaterial actions before physical investment. Therefore, every enterprise, everybranch of industry should beforehand define a long-term strategy before investing inequipment.With regard to small crafts, the local Craft Chamber supported local activities faced to strongcompetition from products imported from mainland France, by working on aspects of qualityand differentiation.These three last forms of intervention proved to be the most effective ones for SMEs in LaRéunion.We have also to mention the support given to small business creation by unemployed peoplewho receive loans at low rate without guarantee, to develop their own jobs. 524 people havebeen helped by this way, one third of them being women.

• SMEs in tourism sector- In Corsica, the objective was to increase the number of overnight stays / beds occupied andto distribute them in a more balanced way in terms of time (season extension) as well as inspatial terms (territorial distribution of accommodations over the territory). According tostudies realized for the Corsican Tourism Agency12, between 1996 and 2001, the number ofbeds occupied has increased by 37%. Moreover, in 1996, 69% of the stays and 72% of the

12 Enquête de fréquentation touristique, Région Corse (saison 1996 mai à octobre), IPSOS Régions, mai 1997 ;Enquête lourde, Fréquentation touristique Région Corse, rapport final, MédiaSIM, avril 2002



beds occupied were in July and August, vs. 50% and 57% in 2001. The tourist season hasextended on spring and autumn.

The hotel park mainly consists of family units hostelry, independent and small seized (30 to50 rooms, 2 and 3-star). These are those which have been supported and for most of them atthe end of the period (1998-1999) because of the serious crisis of tourism in Corsica between1993 and 1996.Moreover the programme has initiated resorts contracts, country contracts or sites contracts.On the basis of a diagnosis made with the operators, it consists in defining a strategy toimprove the global tourist product related to one spot.

In the SPD, tourism was known to be one of the first incomes and employment supplies forthe local economy. However, the regional Development Plan had chosen a strategy of qualitytourism, based on the wealth and the specificity of the natural and cultural heritage of theisland : the tourism activity had to come within the framework of the sustainable developmentof Corsica. A strategy based on "tourism only" or big developments had then been excluded.The strategy which was chosen requires very important means in order to make theprofessionals receptive, to animate local networks around a global offer, to support projectsholders in the local authorities. The methods for attributing ERDF and Contrat de Plan'ssubsidies do not seem to be adapted to numerous initiatives.

Besides, tourism deeply depends on other policies (transport infrastructures, security of watersupply, quality of the soil product, environmental respect, liquid waste and household refuseprocessing, training…). Thus, it is necessary for the tourist component of regionalprogrammes to be examined in horizontal studies with the other components to make sure ofthe coherence of the policies.

- In La Réunion, measured in terms of the added value of hotels and restaurants, tourism isequivalent to about 50% of the added value of industry (INSEE statistics, 1996), which is farfrom negligible. The contribution of tourism to the local economy may be regarded as evengreater if one considers the total tourists' expenses, which are estimated at 320 million euros,i.e. more than the manufacturing sector exports (226 million euros).The main realisations can be distributed between three actions :

- the improvement of the quality of the accommodation offer and its development. Atotal of 15 new hotels have been built and 15 others have been renewed. As aconsequence, the total number of classified beds has increased by 50% during thesesix years.

- The development of new leisure parks : exotic garden, aquatic leisure park, crocodilepark…

- The development of sport activities and equipment on the littoral coast and in themountainous part of the island.

The increase in tourist number, which has been around 5% per annum over the past fouryears13 has not reached the objective of 500.000 initially set in the regional development plan(reaching only 430.000 in 2000). Yet measure 1.6 (increasing and improving the tourist offer)and measure 3.5 (tourist schemes and facilities) were well suited to the context of La Réunion.When projects are well prepared, there is a considerable leverage effect on private operators.

13 (lower than the 12% average rates over the 1994-1997 period)



- Although the French West Indies were not included in the effectiveness case studies, wecan highlight the fact that since 1999, tourism in these islands suffers a relative decline, whichis deceiving regarding the efforts that had been placed in it. It is mainly affected by supposedbetter competitiveness of other Caribbean islands (Dominic Republic, Cuba) or Mauritius asfor La Réunion. It seems that tourism in these islands has to reassert its "brand image" bydeveloping promotion and structuring the tourist policies. But the decline is also due to the airtransport policy with a monopolistic situation for the overseas departments servicing.

The new programmes will focus on vocational training in the tourist sector.

Key questions in the field of SMEs

1. How far has capacity for generating viable businesses been enhanced ?The generation of viable businesses has been enhanced in all the regions not only in themanufacturing sector but also in agri-business in La Réunion and in the tourist sector inCorsica and La Réunion.

2. How far have structural fund interventions raised competitiveness ?Competitiveness within the tourism sector was achieved through differentiation, and notthrough an increase in volume in La Réunion and in Corsica. The strategy adopted wasto position itself on the niches of discovery and sport tourism, and to diversify their offerwith mountains and natural sites.

3. How far have the enterprises supported achieved long term growth/viability ?As far as possible, support to investment has been combined with support to intangibleinvestment (strategy, quality, executive staff recruitment) so as to achieve long termeffects.

4. How has the economic structure of the productive sector been affected by theinterventions ?

In Corsica, several enterprises have shown that it was possible to invest without beingpenalized by insularity (aeronautics, but also ICT). In La Réunion, the agri-businessnetwork have been structured thanks to the programme.

5. What has been the mix of activities supported and which have proved to be mosteffective ?

The most effective mix of activities combines intangible investment, equipment, andstaff training within a single enterprise.

6. How effective has investment been at supporting environmental protection ?This dimension does not appear in the manufactured sector. In contrast, it is totallyintegrated in the touristic development, which takes into account the respect of culturalvalues, landscapes, and local natural resources.

7. How have Funds been distributed and is this an effective approach ?In general, funds were distributed to all SMEs asking to be supported when it was inaccordance with the eligibility criteria. There was no selection except the viability of theproject. Regarding direct support to enterprises, all the interviewees believe that it isdifficult to find other ways of selection, because that would otherwise not respect theprinciple of equal access to the financing process. The public support facilities within theEuropean programmes given to La Réunion differed from the facilities usually given(thanks to specific fiscal laws for investment in the DOMs) as they were orientedtowards flexible interventions like : management recruitment, collective actions and



quality processes.

8. What is the impact of a noted shift towards “softer” programme intervention formssuch as the promotion of networking ?

Networking has been encouraged mainly in the food processing sector in La Réunion. InNord Pas de Calais, the large investments in the Centre d'Essais Ferroviaires hasenabled the development of a series of activities around railway equipment (and landtransport).

9. Which forms of intervention are most effective for SMEs?The most effective intervention supports a mix of : strategy, management recruitment,collective actions on marketing, consultancy services and long term investment intraining.

• Education and training- In Corsica, the university constructions programme which began in 1990 forecasted adoubling of the building surfaces for the 1994-1999. However, only part of this objective wasachieved because of an administrative block within the procedure (one of the call for tenderswas not published at a European level).

- In the French Hainaut, the number of university sites has increased. It seems that theterritorial mesh (maillage) created by Valenciennes' University, allows young people to trainthemselves in highly-specialized fields, when some of them would not have been able to go tostudy elsewhere by lack of means. Now there still is to make sure that these well trainedstudents are able to find a job outside the region, because the local companies' potential oftechnicians recruitment is not unlimited.- In La Réunion, the stakes in term of employment and qualification of the younggenerations arriving on the job market are so important that it is not surprising to notice astrong mobilization around the measures financed by the ESF. The general rise of the level ofqualification is significant. Unfortunately, the trade sector job offer does not follow theprogress of the working population. Initiatives were taken to compensate the weakness of thejob market (help to mobility, support to the economy of solidarity). The 1994-1999programme made several overhangs which should be strengthened in the followingprogramme. Eventually, 12 new high schools and colleges have been built so as to answer tothe urgent need of infrastructure in the secondary education sector (due to the growth ofyoung generations). Contributions of ERDF have been mobilized to participate in a specialplan to build 4 secondary schools and 8 high schools totalising 9000 pupils.A survey conducted in 2000 showed that trainees who had received vocational training foundwork more rapidly within six months of finishing the course (42% were at work as against20% in the initial situation).A total of 20 000 people also received a mobility funding. This enabled skilled or unskilledyoung people to continue their training (mainly) in mainland France and sometimes to find afirst job there.

Key questions in the field of education and training1. How far has the investment in human resources

- removed constraints on economic development ?



Levels of qualification within the population have globally improved. The workforce isthus readier to face the constraints of the job market. In the sector of tourism, efforts interms of training of the workforce are still indispensable so that it adapts to the touristrequirements.

- reduced problems of social exclusion ?The investment in Human Resources, combined with national programmes (law againstexclusions) has enabled a reduction in the number of long term job seekers (the mostexposed to exclusion).

- Improved overall levels of human capital (skills and qualifications) andemployability ?

In La Réunion, a survey conducted in 2000 showed that trainees who had receivedvocational training found work more rapidly (within six months of finishing the course) :42% were at work compared to 20% initially.

2. To what extent has labour productivity been affected by interventions ?Vocational training has improved the qualification of trainees. Business enterprises havebeen associated in the definition of training programme for their employees through mid-term agreements, "Engagements de Développement de la Formation". Increased labourproductivity was observed in all regions.

3. To what extent have constraints in the provision of education and training been affectedby supported interventions ?

Interventions have stimulated the training offer from specialised operators close to theprofessional employers associations. For instance in La Réunion, training has beendeveloped by the Chambre des Métiers for employers and employees in the buildingindustry, the car repair industry and in the food processing sector.

4. What form of intervention has been most actively supported ?The main forms of intervention were support to vocational training (through the RegionalAuthorities programmes), support to job seekers training (State programmes), but alsosupport to the Adapted Military Service (SMA) in the DOMs. The SMA is a special modeof accomplishing the national service in these regions, aiming at favouring the professionalinsertion of young people in the DOMs : young recruits received vocational trainingadapted to the local job market conditions.

5. What forms of investment have proved most effective in improving the supply of labourand improving productivity ?

See question 3 above

6. What have been the impacts of changes resulting from mid-term evaluations? Did thesechanges increase the impact of the interventions ?

Unemployment rates increased nationally, from the end of 1995 to the end of 1997. Theprogrammes then focused on support to vocational training of the unemployed rather thanof young people.

7. What were the reasons for reported difficulties related to policy coordination andadministrative workload and how were the obstacles overcome ?

We have not been aware of such difficulties in France. The main problem (at a nationallevel for all European regionalized programmes) comes from the fact that the managingunits in the SGAR often have no information about outputs within the framework of theESF (as the ESF funds are administered by the DRTEFP services). (The SGAR, SecrétariatGénéral aux Affaires Régionales, is the managing unit in charge of the EuropeanProgrammes within the Préfecture). But this difficulty was overcome in La Réunion werethe AGILE agency ensured that the necessary coordination took place.



8. Overspends on ESF were reported in many Objective 1 regions and related to a higherfocus on mainstream training and employment programmes and underestimations ofunit costs and time. What are the specific causes and how could this be avoided ?

We have not been aware of such overspends.

9. What are the wider impacts of measures undertaken in the field of education andtraining ?

By increasing the offer and improving its quality and its appropriateness, the measures leadto increase the demand in education and vocational training from all parts of society. Moreand more people seem to now take personal initiatives in this field.

10. What is the role of ESF within national education policies ?The ESF globally contributes to the French National Action Plan for Employment (inapplication of the Employment Policy Guidelines (of the European Council). In terms ofnational education policies, the ESF contributes to the funding of the policy of validation ofexperience, and to the objective of reduction of the number of young people prematurelyleaving the educational system. In terms of volume, the impact of the ESF in the Objective1 regions is significant as it represents up to 40% of public orders in terms of vocationaltraining, vs. 3 to 4% in the regions supported only by the Objective 3.

• Research and development

- In Corsica, programmes of technological extension services were begun in association withthe University, as well as works related to the new energies (sun, photovoltaic, wood energy,wind power …). In 199914, the Agency for Environment and Energy control (ADEME) inCorsica reported in particular the following operations : 3 wind-farms supported, 27 projectssupported in terms of photovoltaic electrification of isolated sites, 11 projects supported interms of wood-energy…

- In Nord Pas de Calais, the procedures of support to the technological development in theenterprises (especially FRATT and ATOUT) did not have the expected success. The zonebeing indeed marked by the existence of big groups, SMEs often are subcontractors that donot have their own products, and thus very few strategy of research-development. One cannevertheless underline the support of the programme to interesting initiatives, such as the C3T(Centre of Technological Competence for the Ground Transport), or Valutec (corporationcreated by Valenciennes's University in order to realize services provisions and win researchcontracts in the domains of ground transport and farm-produce industry).

- In La Réunion, the structural funds were used to set up two new structures : the Scientificand Technological Center for Enterprises (ESTER) to ease the access of the regionalcompanies to technology, and a semi-public company to promote the development and use ofITC. The results of these two agencies regarding the local economic fabric so far appear to bepoor. It must be underlined though, that the choice had been made to deal with this sector'sprojects within REGIS programme rather than in the Objective 1 SPD.

Key questions in the field of R&D

1. How far has the focus on RTD succeeded in generating positive spin-offs – and inparticular supported the development of higher value added activities ?

We have not identified specific spin-offs from RTD in the regions surveyed, except the major 14 Source : Leaflet of the Monitoring Committee, 19 November 1999



programme of doctoral grants funded thanks to the ESF in La Réunion, which enabled 120young researchers to work on themes related to regional specificities (such as agri-businessand sugar-cane).

2. What measures have proved most effective in generating R&D ?Actions in R&D were most effective when they dealt with local specificities. In Corsica,research focused on local traditional agricultural in collaboration with the INRA and theUniversity of Corte on the one hand, and on the sector of new energies (especially solar) onthe other hand.In La Réunion, research mainly focused on the agronomical sector (filière) and sugar-cane.

3. To what extent has R&D capacity been enhanced ?The development of university infrastructures in Corsica and in La Réunion also contributedindirectly to the setting up of teachers-cum-researchers on these territories.

4. Where have the greatest gains been made ?R&D capacity was developed in Nord Pas de Calais thanks to the creation of the Centred'Essais Ferroviaires and the CRITT C3T working on land transport. These creationsstrengthened the pole of competences on transports in Valenciennes. This is the mostimportant result of R&D.

5. How important are the links between education and training strategies and those forRDTI to ensure adequate human potential ?

Links are important mainly between secondary education, vocational training and technologyextension services to improve human potential.In the long term, Universities and research greatly contribute to making the region attractive.

6. How important have links between universities / other research centers and theenterprise sector been in RTD growth? How effective has technology transfers betweenregions been ?

Links between Universities and enterprises are difficult to develop if there are no researchteams in the private sector. This is the case in the French Hainaut region where large firmshave developed factories without any design and research teams. SMEs are generallysubcontractors without their own products. Only specific research in selected topics can bedeveloped around local specificities as has been done in railway transportation.Technology transfers from one region to another are done only by firms themselves throughcommercial links or subsidiary companies.

7. Why are absorption rates so low in certain countries? Do regional actors sufficientlyunderstand research and development issues, or are there other implementationdifficulties ?

Low absorption rates are mainly due to the weakness of the private sector in this field (seepoint 6 above).

• Rural development and fisheries sector- In Corsica, the initial objectives of realization were fulfilled in quantitative terms. Howeverit was noticed that many projects had started without making sure of their economic viability.The lesson drawn from the failures of the first years (with the exception of the wine sector)allowed to rectify the trend at the end of the programming period, with a new orientationtowards the promotion of more traditional Corsican products adapted to the pedo-climaticconditions (sweet chestnut, olive, hazelnut, almond).



- In Hainaut, the priorities of the Objective 1 programme in terms of rural developmentwere : economic support to holdings and agribusiness on the one hand, and developmentlinked to the holdings (regrouping of lands, drainage) on the other hand. As regards the largeholdings, the programme consolidated and modernized them. For the small and middle-sizedholdings, they had no access to the programme of modernization, while they were the mostnumerous in the zone. Our interlocutors regret the lack of an ambitious policy for the smallholdings, due to the lack of counterpart funds. The collective actions and agriculturalanimation actions began lately in the programme (essentially from 1998). Theirimplementation often would have turned difficult because of a poorer receptivity of theagricultural and rural world to the Objective 1 programme. Globally, there has been a clearObjective 1 impact over the agricultural holdings : the holdings (even the smaller ones)invested more than if they had not been supported.

- In La Réunion, setting up of young farmers has been facilitated, after a period when theyouth was leaving agriculture, and 421 allocations were given to young farmers during theprogramme. These setting ups have contributed to maintaining viable rural communities evenin the "highlands" (Les Hauts). Given the isolation of La Réunion with regard to continentalmarkets, the strategy has been to process and sell as much local produce as possible on theisland so as to meet the increasing demand in terms of quantity (population growth) andquality (greater purchasing power). The sector strategy has given good results. At the end ofthe chain, this has led to the creation of 30 food processing units, representing about 300 jobs.

The porcine path ensures meat supplies to the region. The bovine sector covers 40% ofconsumption. Similarly, dairy production has doubled since 1994. These three sectors are verywell organised, relying on solid cooperatives.

The sugar cane and other industrial plants represent 30% of the agricultural production and50% of the exports of the island. The structural programmes in progress provide guaranteesfor this sector on the island. Increasing production involves land redistribution, stone removal,opening tracks and cultivating new plots. The irrigation that is now possible thanks to the firststage of the water transfer enables yields to be tripled. The investment made during thisprogramme should therefore give good results provided that agricultural land is protectedagainst urban development. The other productions (fruits and vegetables, meat) are in very netprogress so as to answer an increasing demand of the population. Agriculture has thusmaintained a steady number of jobs since 1994 and contributes to the well balanceddistribution of population within the Island.

As regards safeguarding the environment and preserving the countryside, rehabilitation oftropical forests and reafforestation have been pursued as scheduled. This contributes to theenvironmental protection and to the attractiveness of the rural sector.

A coherent strategy has been settled for a sustainable development of the Highlands (LesHauts). It is related to maintaining multi-activity (agriculture, forestry, tourism…), directvalorisation of the local products, struggle against soil erosion. For this last objective, specialanti-erosive techniques have been elaborated with 119 farmers.

The modernisation of farms, rejuvenation of farmers and development of reasonableagriculture are all guarantees that will help to maintain the island's fundamental andsustainable balances.

Eventually, in the fisheries sector, the SPD enabled that 75 vessels were renovated ormodernised. Productive investments in the aquaculture sector were supported, as well asequipment of fishing ports and fishermen regrouping. The Objective 1 support enabled theconsolidating of about 100 jobs, and contributed to the creation of at least 20 direct jobs.



Key questions in the field of rural development and fisheries

1. To what extent has Objective 1 assisted in improving the social and economic fabric ofrural areas ?

Objective 1 mainly enabled/helped to:- Diversify agricultural productions thanks to the development of the agri-business sector

(mainly porcine and bovine, and the fruits and vegetables production) in La Réunion in orderto supply the local market with local products rather than imports.

- Increase the added value of production, for instance in Corsica, by promoting traditionalCorsican products adapted to the local soils and climate (such as sweet chestnuts, olives,hazelnuts and almonds), or in La Réunion where the new irrigation opportunities –thanks tothe transfer of water- enabled to triple the sugar-cane outputs.

- Stabilise employment in rural areas through the establishment of young farmers and by givingsupport to the cooperative sector (for instance in La Réunion).

- Stabilise the population in rural areas (e.g. Highlands in La Réunion).

2. To what extent has the long-term competitiveness of rural economies been improved ?- In what manner ?- What measures were most effective in delivering these improvements ?

Long term competitiveness has been achieved by focusing on high quality sectors so as tomeet strong local demand (created by tourists during the summer period in Corsica and astrong growth of the population in La Réunion) and to find exporting niches to continentalEurope (from Corsica and La Réunion).

3. How well have different Funds worked towards common objectives ?Funds have had a complementary action in the sector of rural development :- ERDF investments mobilized water resources upstream (in Corsica and La Réunion),- ERDF invested in agri-business units,- Setting up young farmers, structuring new sectors, promoting quality productions through

the EAGGF,- ESF gave vocational training to employees,- FIFG developed hill reservoirs fish breeding in La Réunion.

4. What effect has Objective 1 had on reducing regional disparities ?The programme especially tackled the problems of mountainous rural areas in Corsica and LaRéunion (the Highlands), thus reducing disparities and indirectly facilitating tourist activity inthose rural environments.

5. What has been the impact of interventions on the environment and natural resources ?Interventions in fragile areas were particularly cautious regarding the preservation of naturalbalances.

5.2.3. Key influences on the effectiveness of the programme (external)

For the three regions where we interviewed the managers of the programme, the mostinteresting success factors are the following ones:

- synergy effects with the national programmes, as the Contrats de Plan Etat-Région



- national and international economic context : the favourable international economiccontext contributed to the achievement of the objectives in terms of industrialinvestments, labour and employment, development of tourism and agribusiness.

5.2.4. Success factors

- The preliminary adoption of a regional strategy (Corsica, Nord Pas de Calais),

- An initiative culture and an entrepreneurial dynamics : it is the case in Nord Pas-de-Calais and in La Réunion where the projects arrive to the vetting services without need togo and seek for them.

- A good partnership between State and local authorities : it is the case in Corsica wherethe local authority (CTC) plays an important role; it is also the case in Reunion where thethree partners (State, Region and Department) are jointly presiding the MonitoringCommittee since 1994. This good cooperation at a strategic level can also be translated ina shared organization for the implementation : Agile in Réunion for the instruction and thefollow-up, Poles of conversion in some districts of the Nord Pas-de-Calais for thepreparation of files / projects.

5.2.5. Obstacles

The main obstacles to the good realization of the programme were :

• the weakness of some beneficiaries, owners or founders of the projects, who have nonecessary means to set up the counterparts. This is true in Nord Pas-de-Calais or inCorsica. It is less verified in La Réunion where local authorities have autonomousresources.

• the lack of practice in the management of large projects. This is true in Corsica where theprojects are not prepared enough to be implemented in time, and partly in La Réunionwhere the large project of the Southern Boulevard of St Denis was modified several times,ending with a level of realisation inferior to what had been initially forecasted.

5.2.6. Horizontal issues

Equal opportunitiesThe 3 SPDs were likely to have an impact on equal opportunities through their measuresregarding the development of human resources. Most of the measures of the SPDs were"gender neutral".

In Corsica, measure 7.2. aimed at fighting exclusion from the job market, mainly throughactions of training and accompaniment in favour of women, especially those having noprofessional qualification, or reintegrating the job market after a period of absence. The SPDforecasted to help about 180 women through this measure. On the period 1994-1998, 2284persons benefited from actions under measure 7.2. among which 1124 women (i.e. 49%).Even if measure 7.2. was the only one stating specific objectives for women, it appears that,regarding the outputs, all the measures cofinanced by the ESF presented the gender distinctionbetween the beneficiaries :



Measure 7.1. (Support and adaptation of employment, promotion ofcompetitiveness and fight against unemployment) : 44% of women

Measure 7.2. (Fight against exclusion from the job market) : 49% of womenMeasure 7.3. (Development and adaptation of the qualifications of young people)

: 42% of womenMeasure 7.4. (Development of a potential of research, science and technology) :

39% of womenMeasure 7.5. (Systems and structures of training and employment) : 61% of

women

Globally for measures under axe 7, women represented 44% of the beneficiaries.

In Hainaut, the SPD can be defined as "gender neutral", as no particular action wasforecasted to promote equal opportunities between men and women. According to the 2000-2006 SPD, "men and women have always benefited from actions implemented by the publicinstitutions without restriction. However, we are forced to notice that without specific actionin favour of equal opportunity, common right policies do not reflect the mixed composition ofsociety". The policy of equal opportunities is then considered in the 2000-2006 SPD as a "newobjective of public policies".

In La Réunion, according to the ESF final report, actions and measures cofinanced by thestructural funds and the FIFG were compatible with the Community policy and regulations interms of equal opportunity between men and women, and possibly contributed to thisobjective. In the framework of the ESF, the taking into account of equal opportunities took 2forms :

- quantitative elements in the sector of training and insertion : on the 1994-1999 period,about 1/3 (one third) of the beneficiaries of the ESF actions were women;

- specific actions were funded essentially through REGIS programme (sub-measure"professional equality", sub-measure "transnationalité" establishing links withwomen of other European countries).

In the three regions, female activity rate is below the national average, often expressing twosimultaneous phenomena : a weak qualification of the workforce and a very limited job offerfor a weakly qualified workforce. In Nord Pas-de-Calais, the solution can be encounteredthrough enterprise creation by women.

Employment rates in the Objective 1 regions 1999(% of population aged 15-64)

Corsica NPC Réunion Guadeloupe Guyane Martinique ContinentalFrance

Women 41,5 44,1 30,7 39,9 36,5 42,1 53,6

Men 59,8 60,8 43,5 49,4 52,2 50,1 66,2Source : INSEE (RP 1999)

At the end of the period, the female employment rate (i.e. the share of working women amongthe total population of women aged 15-64) is still largely below the continental average. Ifthis employment rate is lower in the DOMs, it is partly because of the inclination of women tofind a job outside the family is lower there than in continental France. This would express adifferent way of life and family solidarity rather than a slow development.



EnvironmentThe concerns in terms of environment were present in every region, but with an uneventreatment.

In NPC the situation globally improved, especially with the requalification of industrialfallow lands. According to a case study of Reverdy Associés within the framework of the"Evaluation of the contribution of Structural Funds to sustainable development"15, emission ofpolluting through air, water and even untreated domestic waste have globally decreased inNord Pas de Calais over the past years. On the contrary, the consumption of resources, such asenergy or land, has increased.

In Corsica, priority was given to the purification of the coast and to the conservation ofexceptional sites. In Corsica as in La Réunion, household refuse processing was delayed. Inthese islands, the authorities have been especially concerned with a tourist developmentrespectful of environment.

We can also mention that in the West Indies, the environmental measures were among thepriorities of the programmes. In Guadeloupe, the first regional "Agenda 21" in France wassigned at the end of the programme in June 1999, with the ambition to make of Guadeloupe apole of excellence in the Caribbean. In the DOMs globally, the environmental outputs relatedto water provision and water treatment units.

5.2.7. Fund Distribution and Effectiveness

Part of the analysis here can be found under the effectiveness analysis by thematic priorityand within the regional tables : indeed, effectiveness for ERDF mainly regards the sectors oftransport and support to SMEs, whereas effectiveness for EAGGF and FIFG refers to thethemes of agriculture and fisheries, and ESF to human resources globally.

ERDFIt is rather difficult to attribute the net creation of permanent jobs to the ERDF (few quantifiedindicators are available from field surveys on beneficiaries, except for NPC). From theefficiency case studies and also from previous evaluation studies done by our team in similarregions in France we propose in § 7 (Impact) an assessment of job creation under ERDF. Inthe DOMs the infrastructure programme supported by ERDF enabled the creation of jobs inthe construction sector during implementation.

The renovation and construction of new airports and ports allowed these regions to get closerto the European markets, and thus contributed to regional convergence.

When it comes to support to enterprises, the ERDF enabled the creation of jobs bycofinancing state aids such as FDPMI (support to the development of SMEs at a nationallevel), FSI (support to the establishment of large enterprises in Nord Pas de Calais), that thevetting services were used to "handle".

15 Evaluation undertaken by GHK Consulting Ltd for the European Commission (DG Regional Policy and Cohesion)



ESFConcerning the role of the ESF in improving access to the labour market, a study in LaRéunion showed that people having undertaken vocational training cofinanced by the ESFwere comparatively favoured regarding their access to a job.

The ESF was also very effective when it came to development of skills, professionalqualifications and social insertion. In La Réunion for example, the ESF is by far the highestfinancing contributor to vocational training in the region (43% in 1999). This position can bejustified by the higher unemployment rate remaining in this region, and by the concentrationof European funding on La Réunion programme.

EAGGFThe EC funds granted to agriculture and rural development in the framework of the Objective1 programmes only represented 9% of the total amount. Agriculture was not considered as thepriority within the Objective 1. Nevertheless, in La Réunion the EAGGF was found effectiveespecially when it came to support national devices (socio-structural measures andreinforcement of production "filières") and the results are in proportion of the support given.In Nord Pas de Calais, the most effective measures seemed to be the ones concerningmodernization of holdings and conforming to environmental standards.

FIFGThe major problem that hindered the FIFG's effectiveness was that there was not a specificstrategy and negotiation in terms of fisheries for the French islands. Investments were stoppedin this sector between 1996 and 1998. It is difficult then to assess the effectiveness of thisfund.

The methodology guide also set out a series of questions related to the effectiveness of funds.The country expert 's assessment, largely based on qualitative evidence, is presented in thefollowing table.

Key questions by Fund

o ERDF1. How far did support contribute to the creation or maintenance of permanent jobs ?

What were the most effective mechanisms in achieving this ?It is difficult to distinguish the real impact of ERDF assisted measures from the impact ofthe favourable development due to the regional and national context. The programmescontributed to the development or confirmation of sectoral strategies (ground transport inNord Pas de Calais for instance) : they contributed thus to job creation or preservation.

2. What has been the effect of supported investment in transport, energy andcommunications networks ? How has this contributed towards regional convergence ?

Transport investments contributed to the convergence of the regions (Corsica and DOMs)by bringing them closer to the European continent and thus contributed to their economicdevelopment. Investments in basic infrastructures (water provision, educational facilities)enabled the DOMs to come closer to European standards. Investments in energyinfrastructure was not the priority though interesting projects towards new energies havebeen developed, including the use of sugar cane "bagasses" (waste) in La Réunion.



3. Which of the following measures have been adopted to support internally generateddevelopment?

- Assisting business services- Financing the transfer of technology and innovation- Improvement of access to the capital market- Direct aid to investment- Provision of small scale infrastructure

All these types of actions have been financed within the framework of the programmes.Global strategies integrating several of the above measures were more likely to be effectiveand to ensure endogenous development of regional enterprises.

o ESF1. To what extent did support facilitate access to labour markets ? What were the most

effective measures in achieving this ?The support to actions aiming at offering a better qualification to job seekers and youngand under qualified people (through regional authorities policies) proved to be the mosteffective - especially when it was based on personalized support. The beneficiaries hadindeed more opportunities to access the job market.

2. To what extent did supported actions promote equal opportunities in the labourmarket ?

Supported actions respected the equal opportunity principle, rather than promoting it. Inthe DOMs, specific programmes within REGIS II were used.

3. How far did Objective 1 contribute to the development of skills and professionalqualifications ?

In La Réunion for example, a survey conducted in 2000 showed that trainees who hadreceived vocational training found work more rapidly (within six months of finishing thecourse 42% were working compared to 20% initially).

4. In what way were education and training systems strengthened ? What was the overalleffect of this ?

In La Réunion, ESF funding represented more than 40% of public orders for vocationaltraining. The programme was a significant accelerator for the vocational training offerregarding hotel business and tourism, with for example the Hotel Centre of Training (CFA)"le Centaure", set up with the help of major hotel groups such as Hilton or ACCOR.

5. To what extent did public officials receive training ? What benefits did this provide ?We have no comprehensive information on this issue. Annual national seminars wereorganised by DATAR (French Governmental Agency for territorial planning) for themanagers of the Objective 1 programmes. Consequently, at the end of the programmeperiod, public officials were much more aware of issues of evaluation and soundmanagement of the programmes.

6. What was the extent of support provided to boosting human potential in research,science and technology ? How well did this integrate with other Structural Fundactivities ?

The only support provided to boost human potential was the implementation of technologytransfer centres in Nord Pas de Calais, Corsica and La Réunion.



o EAGGF1. To what extent did the assistance facilitate the setting up of young farmers ?To what extent has this contributed to the maintenance of viable rural communities ?In La Réunion, the programme helped young farmers to get set up within the limits of landavailability after the "slicing up" of the big sugar cane holdings. This support enabled tolimit the decrease of the rural population of the island.

2. To what extent have interventions helped to assure the continued viability ofagricultural holdings?

Through modernization and conformity to environmental standards (in Hainaut).

3. What impact have supported investments had on the environment ?Interventions in fragile areas were particularly cautious regarding the preservation ofnatural balances.

4. To what extent did the investment supported lead to a more rational production andimproved efficiency on agricultural holdings ?

In Corsica, after a first period when allocations were distributed to the farm holders withoutproper selection, it was decided to focus mainly on products specific to the Corsican soil.In La Réunion, the sugar cane sector (filière) benefited from land restructuring andirrigation operations. Productions were geared towards higher quality products and otherplants .In La Réunion agri-business, Objective 1 support enabled the implementation of arationalisation process, as well as an increase in productivity of 50% in 5 years (the added-value per employee grew from 40 000 € to 60 000 €).

5. Did allowances for Less Favoured Areas contribute to offsetting the costs of naturalhandicaps

- To what extent did such payments maintain farms that would otherwise have beenabandoned ?

Aids were geared to quality productions adapted to the soil and climate conditions.There were no "allowances for Less Favoured Areas" in the framework of the Objective 1programme, but rather interventions to support investments in agricultural holdings, inlocal cooperatives, in setting up of young farmers…

6. To what extent have compensatory allowances contributed to safeguarding theenvironment and preservation of the countryside?

There were no specific compensatory allowances through the programme, but specificinvestment projects to safeguard the environment, as the projects against soil erosion in theHighlands of La Réunion. Agro forestry projects were developed with the help of researchunits.

7. To what extent have investments made helped to improve the competitiveness ofagricultural products

- What impact has this had on producers of basic products (higher prices received etc)Basic products got higher prices if they were on high quality segments as it has been donein Corsica and La Réunion.

8. What effect did rural training measures have on offsetting identified economicconstraints?

Agricultural extension services are organised through specific measures within theChambers of Agriculture (Chambres d'Agriculture), the SAFER (land redistribution), inter-professional organisations like the SICA-lait and other cooperatives, for specific products.For instance, in the breeding industry and the vegetal sector (filière végétale) in Réunion,there are more than 350 extension agents working (and regularly trained) in the field.



o FIFG

1. To what extent did Objective 1 expenditure contribute to achieving a sustainablebalance between resources and their exploitation ?

In La Réunion for example, the programme contributed to the preservation of the networkof small fisheries thanks to the renovation of vessels, but also to the setting up of fishconcentration processes, thus enabling more sustainable fishing and resource development.

2. To what extent did Objective 1 expenditure contribute to strengthening thecompetitiveness of structures and the development of economically viable enterprises inthe sector?

A large proportion of total expenditure under the SPDs occurred in the aquaculture sectorand it helped to improve the economic viability of existing and new enterprises.

3. To what extent did Objective 1 expenditure contribute to improving market supply andthe value added to fisheries and aquaculture products ?

FIFG expenditure had an impact in increasing overall output from the aquaculture sector.

4. To what extent has the capacity of the fisheries sector been aligned with sustainablelevels of fishing activity?

Concerns about "over-fishing" (surpêche) in Northern Europe are not relevant when itcomes to the DOMs : around these islands, stocks are still existing. The EC has by the wayconcluded Fisheries agreements with the neighbouring territories of Mauritius or theSeychelles, which are an evidence that there is no major concern about resources in theSouthern part of the Indian Ocean.

5.3. Assessment of Community Added ValueBetween the three regions (French Hainaut, Corsica and Reunion) the points of convergenceand difference as for the assessment of community added value are the following ones:

- Contribution to the economic and social cohesionIn the three regions, growth was stronger than the national average and the level ofinvestments was steady. This is not always expressed in productivity gains. In La Réunionthe manufacturing sector has some difficulties to improve its competitiveness in front of theproduction of surrounding countries.

The integration in the European market is stronger for NPC and Corsica. The DOMs havedifficulties in finding their place in this market except in tourism and food processing.

- Community prioritiesFor the islands (and Guyane), the modernization of airport infrastructures facilitates thelinks with the European continent. For the Nord Pas-de-Calais, there were no specificprogrammes of infrastructures with the aim of exchanges with the border countries.

The investments in education and training were a priority for the three regions, whichmade good use of the ESF subsidies. The environment was the subject of specific



initiatives in every region : organization of the industrial fallow lands in the North,protection of mountainous or coastal sites in Reunion and in Corsica. However in theislands, the questions of purification of water and waste treatment come up against theproblem of the municipalities having weak resources : the creation of the "Communautésde Communes" will be the only way to solve this problem.

The priority of equal opportunities was the subject of no particular treatment in any regionwithin the SPDs, but in Réunion for example, it was treated within the REGIS programme.

- Balanced and sustainable developmentThe concern for a balanced and sustainable development is present in every region. Thedevelopment of tourism from small units based on local specificities thus favours a qualitygrowth (Corsica and La Réunion).

- Financial criteriaAdditionnality – According to a document given by DATAR16 to the EuropeanCommission, the State and the local authorities increased their contributions from aprogramme to the other one : the structural expenses coming from a national level increasedfor about 20% (in constant Euros) for all the Objective 1 regions.

Additionnality Objective 1 - France

Annual average1989-1993 1994-1999

Total(national + SF)

National Total(national + SF)

National

in M€1999

2 020 1 857 2 499 2 221

in % 100% 92% 100% 89%Source : DATAR

Leverage effect - The leverage effect on public financing is significant even if in someregions (Nord Pas de Calais and Corsica), small local authorities had difficulties at the endof programme in financing their counterparts. The leverage effect on the private sectortakes more time to express itself on the islands, except in the sector of tourism and thefarm-produce industry in La Réunion. The quantification of the leverage effect17 of theStructural Funds gives the following table :

Structural Funds leverage effectRegion

Expected AchievedCorsica 1,7 2,2French Hainaut 2,1 2,5Réunion 0,9 0,8

16 DATAR : French Agency for Territorial development17 NB : Gross leverage effect = (Total expenses – Structural Funds Contribution) / SF contribution



Guadeloupe 1,3 1,0Guyane 0,8 1,0Martinique 0,9 1,4France (average) 1,3 1,4

Source : Reverdy Associés, from the initial SPDs and the ultimate states ofrealisation of the programmes

This table shows that for the two continental territories, the gross leverage effect would bemuch stronger than for the DOMs. Here we must remain cautious on this assumption : infact, the basis of the eligible expenses taken into account varies from a region to anotheraccording to the ways of management of the programmes. Then, in a concern foroptimisation of the credits' utilisation, the programme managers in La Réunion hadselected some projects for SF use with high rates of European contribution, instead ofdistributing this contribution on more projects; the other projects would then be financedwith other national funding. The managers of the programme in La Réunion explain by thismethod the good rate of realisation they have reached.

- Criteria related to the structural funds methodWe can say that national priorities are exactly the same as those of the Europeanprogrammes. The adopted strategy is common to the Contrat de Plan's.

If the monitoring system is perfect as for the administrative and financial follow-up, it hasnot been used a lot to produce states of physical realization.

Globally, the monitoring system -with regular meetings of the Monitoring Committeeimplying all the stakeholders- is a strength of the Structural Funds' method that can not befound as regularly in the other forms of partnership (Contrats de Plan for example).

Below are the three tables established in the framework of the regional case studies.

CORSICA

Yes No EvidenceCOMMUNITY DIMENSIONContribution to economic and social cohesion1. Additional growth x During the second period (after 1997) Corsica's

growth was higher than the national average.2. Increase in the level of investment x Important infrastructures have been realised with

European funding.3. Productivity gains x Yes, by investments in the productive sectors,

SMEs and agriculture. But gains of productivityare still weak in agriculture. Public sector shareremains higher than the national average.

4. Greater economic integration x The industrial companies supported by theprogramme work for the mainland withoutsuffering from their insular isolation.



Yes No EvidenceCommunity priorities5. Infrastructure provision, particularly trans-European networks- effectiveness of infrastructure- accessibility

xStrengthening of big access infrastructures is nowachieved (ports, airports) ensuring an effectivecontinental continuity.However, the link between Bastia and Bonifacio,considered as "trans-european" because it makesthe link with Sardinia is far from the expectedlevel.

- energy efficiency and diversification- new information technologies- connections to drinking water and waste

recycling systems

x

x

Development of renewable energies was carriedon, photo-voltaic, wind energy, micro powerstation.

Waste recycling plants have been postponed6. Regional competitiveness- public and private expenditure on &D x- employment in R&D x There are mostly public centres of research which

have been supported (INRA, CRITT,Universities).

- potential for job creation through localdevelopment initiatives

x Entrepreneurial spirit has improved

7. Human resources- improved employability- reducing long-term unemployment- employment rate

x Credits were used to develop the training offer.Employment has increased more rapidly than thenational average.Quantifier

8. Environment- Fund contributions to compliance with

environmental standards

x Delay in measures concerning waste treatment.

9. Equal opportunities- rate of employment among women- number of women setting up a business

x The employment rate of women has increased butit is still lower than the national average (39,3%vs. 48,7%).

Balanced and sustainable development10. Better distribution of economic activitiesover the Union- regional convergence

x Real recovery of GDP (with a growth rate superiorto the national growth rate)

- degree of concentration of economicactivities

x Better integration in the European economy.

- Quality of growth (sustainability index) x Development mainly based on small productionsunits in industry as well as in tourism. Increase insocial capital.

FINANCIAL CRITERIA11. Additionality- changes in structural expenditure of

national origin (annual average)x

The state has extended its investment effortbeyond what was foreseen.

12. Financial leverage effect- national public co-financing mobilised

under the Structural Funds

xRegional and national funding complemented thestructural funds up to the forecasted level. Therestriction rather comes from the weakness ofsome local public beneficiaries which havereached the limit of their possibilities.

- private sector expenditure x Private sector delays replacing public investment.The sector of tourism affected by the 1993 crisisretook its investments at the end of the period.



Yes No EvidenceCRITERIA RELATED TO THE STRUCTURAL FUNDS METHOD13. Quality of multi-annual programming- degree of integration between national

and Community priorities- degree of coherence between national

and Community programming

x

x

Same priorities.

"

14. Enlarged partnership- extent of the partnership- degree of efficiency

xPartnerships with Chambers of Commerce andother chambers, Universities, developmentagencies

15. Control – Audit- share of projects audited

x Funds use have been the subject of many externalaudits according to public officers we met .

16. Development of monitoring systemsbased on quantified objectives- share of measures covered by financial

and physical monitoring information

x The follow up of financial realisations is reliable.The follow up of physical realisations is still weakin spite of the warnings of the intermediateevaluation in 1997.

17. Extension of evaluation work in thepublic administrations- external evaluations- budget for evaluations- evaluation structures- quality of evaluations

xxxx

There were few attempts to follow therecommendations of the intermediate evaluation.No evaluation nor final balance accounting forphysical realizations and results.

CROSS-BORDER AND TRANSNATIONAL COOPERATION AND NETWORKING18. Added Value of cooperation activities- joint cross-border of transnational

management committees- joint projects involving administrations

and/or companies- cooperation projects with non-member

countries

x

x

x

No links with other European regions in thisframe.Some projects related to dairy products betweenCorsica, Basilicate, Andalusia… in the frameworkof Interreg and Leader.

19. Innovative actions- multiplier effects in terms of volume of

investment mobilised and jobs created inthe region

- degree of transferability of actions(mainstreaming)

x No transnational action

20. Networking and exchange of experiences- initiatives and seminars on exchanges of

experiences on the Structural Funds

x No specific action in this field



NORD PAS DE CALAIS

Yes No EvidenceCOMMUNITY DIMENSIONContribution to economic and social cohesion1. Additional growth x The employment growth in the Objective 1 area

(12%) was higher than that of the global region(8,4%), itself above national average (5,6%).There is hence a clear effect of compensation thatcan partly be attributed to public aids.

2. Increase in the level of investment x Between 1993 and 2000, the region Nord Pas deCalais was ahead in terms of foreign investmentsin France. It was the first French territory from1996 to 1998; in 1999, the region ranked secondafter region Ile de France, with 54 new decisionsof foreign investments, for 2855 jobs (Source :Nord France Expert, sept. 2000)

3. Productivity gains x Investments in the productive sector4. Greater economic integration x The industrial redevelopment of those areas

enabled a better integration in European andinternational economy with important foreignsetting ups.

Community priorities5. Infrastructure provision, particularly trans-European networks- effectiveness of infrastructure- accessibility- energy efficiency and diversification- new information technologies- connections to drinking water and waste

recycling systems

xx

Positive results in terms of infrastructure…… but the trans-border aspect did not benefit fromany specific measure in the SPD. Various projectshave nevertheless been studied or evenimplemented in the frame of Interreg programmesamong others. They proved the expectation, theinterest and the stakes in trans-border relations ofproximity and also inter-cities. Eventually, theinternational opening up of the region and itseconomy justifies the research and thedevelopment of solutions adapted to exchange andtransit problems.

6. Regional competitiveness- public and private expenditure on R&D- employment in R&D- potential for job creation through local

development initiatives

xx

x

Creation of poles of competencies in landtransports and in I&T companies.

Development mainly exogenous

7. Human resources- improved employability- reducing long-term unemployment- employment rate

xxx

Growth of education levels.

Employment growth higher in the area than in theglobal region


environmental standardsx Rehabilitation of industrial fallow-lands : more

than 2000 hectares of industrial fallow-landsrequalified



Yes No Evidence9. Equal opportunities- rate of employment among women- number of women setting up a business

xIn 1999, women's employment rate has increased(30%) but men's is still higher (43%) in the FrenchHainaut. It is also lower than the regional average.



- Quality of growth (sustainability index)

x

x

x

Redevelopment of the Objective 1 area (no dataavailable on the GDP at an infra regional scale).Concerns due to a strong concentration ontransport industry.Increase of human capital by qualification,increase of natural capital by industrial fallowrehabilitation


national origin (annual average)x The French State maintained its investment effort

specific to those three fields (cf. Special Fund forEstablishment)



- private sector expenditure

x

x

The national and local financing accompanied thestructural funds at the expected level. Thelimitation comes rather from the weakness of somelocal public beneficiaries that reach the limit oftheir possibilities.Leverage effects on private firms

CRITERIA RELATED TO THE STRUCTURAL FUNDS METHOD13. Quality of multi-annual programming- degree of integration between national



x

x

National and Community priorities are the same.

In the agricultural sector for instance, the prioritiesof the SPD are not different from the nationalpriorities.


xPartnerships with Chambers of Commerce andother chambers, Universities, developmentagencies


No information


and physical monitoring informationx Few measures had numerical goal indicators.

Little follow-up.17. Extension of evaluation work in thepublic administrations- external evaluations- budget for evaluations- evaluation structures- quality of evaluations

x

x Only mid term evaluation has been done

From now on, an evaluation cell exists within theState services in the region.



Yes No EvidenceCROSS-BORDER AND TRANSNATIONAL COOPERATION AND NETWORKING18. Added Value of cooperation activities- joint cross-border or transnational


and/or firms- cooperation projects with non-member

countries

x

x

x

No coordination with what was done at Objective1 level in the Belgian Hainaut.




x No transnational action


experiences on the Structural Funds

x Nothing in this field

REUNION

Yes No EvidenceCOMMUNITY DIMENSIONContribution to economic and social cohesion1. Additional growth x Growth in GDP is above the national average2. Increase in the level of investment x Major infrastructures have been emphasized3. Productivity gains x Yes for agriculture, which is competitive;

reservations regarding the secondary sector.4. Greater economic integration x The region has not found yet its place in European

tradeCommunity priorities5. Infrastructure provision, particularly trans-European networks- effectiveness of infrastructure- accessibility- energy efficiency and diversification- new information technologies- connections to drinking water and waste

recycling systems

x Modernisation of the airport has enabled directlinks with the mainland.

6. Regional competitiveness- public and private expenditure on R&D- employment in R&D- potential for job creation through local

development initiatives

x

xx

Agronomic research has progressed. For the rest, itis essentially a question of dissemination.

Job creation by unemployed people has beenfinanced



Yes No Evidence7. Human resources- improved employability- reducing long-term unemployment- employment rate

x

x

Very good use of ESF credit for improvingqualifications.

Still low due to population growth


environmental standards

x Initiatives to preserve the exceptional naturalheritage.

9. Equal opportunities- rate of employment among women- number of women setting up a business

x No significant initiative within this programme(but it is the case in the programme REGIS II forthe DOMs).


x Yes, with regard to the GDP indicator.


x Apart from tourism, it is difficult to identifysufficiently the regional distinguishing features soas to be integrated on a longstanding basis into theEuropean economy.

- Quality of growth (sustainability index) x Quality of tourist development.Development of very small enterprises (VSE) andcraftsmen.


national origin (annual average)

x The State and the Region have increased theircontribution compared to the previous programme



xAfter signing the SPD, the guarantee that the fundsare earmarked without further arbitration has animportant leverage effect on other sources offunding.

- private sector expenditure x Private sector investments can be helped withother aids with less constraints (tax exemption).

CRITERIA RELATED TO THE STRUCTURAL FUNDS METHOD13. Quality of multi-annual programming- degree of integration between national



x

x

Same priorities.


x Partnership has been strong all along theprogramme with the 2 levels of the MonitoringCommittee meeting at regular dates and includingall the stakeholders.


x Information is given in final reports :ERDF : 11% of the total eligible expenses werecontrolled between 1999 and 2001.EAGGF : 22 individual files were controlled (towhich can be added the controls made byintermediary bodies), i.e. 2,5% of the totalexpenses.ESF : 3,3% of the total expenses have beencontrolled (13 files).FIFG : control rate superior to 5%.



Yes No Evidence


monitoring information- and physical monitoring information

x

x

Monitoring of financial realisations is reliable.But monitoring of physical indicators is weak.

17. Extension of evaluation work in thepublic administrations- external evaluations- budget for evaluations- evaluation structures- quality of evaluations

x

x

xx

Some thematic evaluations have been done.However, management or control works haveincreased, to the detriment of evaluation orprospecting works.

CROSS-BORDER AND TRANSNATIONAL COOPERATION AND NETWORKING18. Added Value of cooperation activities- joint cross-border of transnational


and/or firms- cooperation projects with non-member

countries

x

x

No links with other European regions in thisrespect.

There is here a problem of coordination betweenthe rules of intervention of ERDF and EDF.




x Some actions were undertaken within REGIS.


experiences on the Structural Fundsx A seminar of Objective 1 regions has been

organized in La Réunion

5.4. Changes to policy and practiceChanges of practices

The changes of practices can essentially be found in the learning of management by project.The "counter" logics (logiques de guichet) are slowly being abandoned (Corsica, Réunion) infavour of a "logic of project" or by functional phases.

In Corsica as in Reunion the habit of associating more stringently the regional authority to theresponsibility of the programmes gave very good results. This is now generalized in all theFrench regions.

• In Corsica, the main changes of methods in funds utilisation concerns agriculture andhydraulic works.



Change of practicein Corsica

Influence of the programme Meaning of thechange

Meaning of theinfluence of the

programmeInitially, the farmers presentedthemselves to obtain financialaid (reaching until 80 %) in a"counter" logic (logique deguichet). Many of their projectswere later abandoned.Today, the "project logic" istaking over, with a morevigilant vetting by the RegionalCommittee of aids, in which thestate representatives areparticipating .

In 1998, the State and theCollectivité Territoriale deCorse (C.T.C) decided tomodify the system of aid andto consider the projects'viability in the frame of realspecific assets for Corsica :chestnut, olive, nut, almond.

Confrontationwith andmobilisation ofruralorganisationswere among themain factors toprepare changesin practice.

Hydraulic works weretraditionally intended foragricultural irrigation. Today,the demand has changed(tourism, urban water). Worksfor water retained in reservoirsare less numerous, for thebenefit of a better managementof the existing resource,especially water transferbetween basins.

The programme madeobligatory the realisation of"functional phases".

The scarcity ofwater resourceand the multipleneeds weretaken intoaccount.

The limitedfunding push thevetting services tofind the best waysto reach anobjective.

• In Nord Pas-de-Calais, the development of intercommunity was favoured by thedimension of the projects which exceeded the municipal territory. The programme didn’t leadto political changes : there is a continuity with the previous policy of industrial conversion inthe employment areas.

At local and regional level, the programme brought some changes of practice.

Change of practice in NPC Influence of the programmeDevelopment of inter-communality Obligation of sharing the projectsDevelopment of the action and the economicpractice of local authorities

By the necessary co-financing, local authorities wereinvolved in wide regional projects

In Valenciennes : creation of an Agency ofUrbanism, future tool which could becomeDevelopment Agency

• In La Réunion, the reinforcement of a body of management and follow-up of theprogrammes common to all of the three partners (State, Region, Department) facilitated theirimplication in the programme and a better transparency in the decisions.



Changes in practice in LaRéunion

Influence of programme Significance of change

At the start of the programme, itwas more a question of subsidyreserving (reserving aprogramming authorisation andthen applying for paymentcredits as needs arose).

Later, financial means weregranted for the follow-up ofprojects after programming, andfor the chase of "sleeping"projects.

Programming in the E.U sense isirreversible. A project musttherefore be ready in everyrespect.

Community "discipline" meanschoosing the right project at theoutset.

Change in the relation betweenproject promoters andprogramming officials.

5.5. Conclusions on effectiveness

Key questions on effectiveness• Were the objectives at priority level in the SPDs clearly defined and quantified ?As stated in the appraisal of the SPDs strategies in § 4.2.1., the objectives at priority levelwere clearly defined with two main objectives :1/ development of economic activity2/ improvement of qualifications.The third objective ("external opening up of the territories") is serving the first ; the lastobjective related to balanced territories and environment is complementary. This was clearlydefined but not quantified as already pointed in 5.1.1.

• How far have these objectives been achieved ?We think that objectives 2, 3 and 4, as reminded above, have been globally achieved for thethree regions investigated in details (Nord Pas-de-Calais, Corsica, La Réunion). The firstobjective, even if there was employment growth in the three regions due to the programme, isnot at the awaited level in Corsica and Réunion. That is to say : basic infrastructure in termsof transport, education and training has reached the right level, but in Corsica, there is stillsomething missing in the field of entrepreneurship. In La Reunion, economic exchanges withEuropean continent remain very unbalanced. The development of infrastructures especiallycontributed to the economic convergence and opening up (désenclavement) of the WestIndies and La Réunion : the outputs in terms of infrastructures (roads, airports) are the mostsignificant. The modernization and enlargement of airports in the West Indies enabled theislands to welcome wide-bodied aircrafts (especially interesting when it comes to tourism),and created a direct link between La Réunion and continental France.Good results were obtained in agriculture : this sector maintains its jobs at a good level andits presence in remote and fragile areas.But the other economic sectors are not able to take a sufficient part in economic development.

• What other achievements have been recorded by the Objective 1 programmes ?In terms of education the benefit of the programme was extended in La Réunion tosecondary education sector.One of the results which were not scheduled at the beginning is the shifting from a "counter



logic" to a management by objectives, programme and projects.

• What were the processes (management and implementation) which led to effectiveness orlack of effectiveness of interventions?

The best process which led to effectiveness is a strong strategy on long term shared by allparticipants to the programme, strong regional development agencies which help thegeneration of projects, project holders who have an economic long term view and not anopportunity mind.



6. EFFICIENCY ANALYSISFour efficiency analyses have been completed. The case studies are presented in annex to thisreport.

Two of them concern support to investment in industrial units with creation of new jobs(Maubeuge Construction Automobile and OGURA), both others are linked to infrastructuresconsolidating the regional economy (Rail Trials Centre in Valenciennes, urban highway inSaint-Denis de La Réunion).

6.1. Description of projects6.1.1. Brief description of selected projects

Project type Number assessed Total Value(planned)

Industrial investments 2 35,28 M€Transport infrastructure 1 41,61 M€Research and technology 1 18,4 M€

- MCA (Nord Pas de Calais) is an automobile industry plant which is part of Renault group.The project was included in an investment plan that had started in 1994 and consisted in arenovation plan of MCA's industrial machinery. The modernisation plan of the enterprisewas accompanied with a strong effort on vocational training. The investment was fundedthrough the Special Fund for Implantation (FSI) that allows support to big enterprises.

- OGURA (Nord Pas de Calais) is also a firm of the automobile sector (from a Japanesegroup making air conditioners for cars). They decided to settle in Nord Pas de Calaisregion in 1996. The supported project was an acquisition of material and tools, and waspart of the total construction investment of the plant. This funding entered in theframework of the FSI. In July 2002, only 2/3 of the forecasted investments had beenrealized, due to lower orders from OGURA's main client (donneur d'ordre).

- Centre d'Essais Ferroviaires (Rail Trials Centre) (Nord Pas de Calais): in front of thelack of trial and research equipment in Northern Europe in the railway sector, Europeanconstructors and public partners decided to create their own centre for conformity andtechnical certification trials. Three circuits have been built. The interest of such a projectis undeniable, as the CEF consolidates the regional concentration in Valenciennes in railtransport (and more globally land transports) as a real pole of competences.

- Boulevard Sud de St Denis (La Réunion) : As a backbone to the road system, theRéunion Development Scheme had called for a dual carriageway from Saint-Benoît toSaint-Pierre. The section running through Saint-Denis has been designed as an 8 km longurban boulevard offering good connections to the city and reorganising access to itssouthern districts. It relieves the former RD44 freeway of transit traffic, so that a speciallane for public transport can be created, serving the city centre.



6.1.2. Final beneficiaries

Project name Final beneficiaryMCA MCA's firmOGURA OGURA's firmCentre d'Essais Ferroviaires The research centreBoulevard Sud St Denis Regional Authority (Conseil Régional) of

Réunion

6.1.3. Changes to plan

Project Initialcost ofproject

Final cost Plannedduration

Finalduration

Planned outputs Final outputs

MCA 17,38 M€ 17,38 M€ 4 years 2 years Installation andmodernization of apainting line.Creation of 211 jobs.

Installation andmodernization of apainting line.Creation of 389jobs.

OGURA 17,9 M€ 11,3 M€ 3 years 3 years Production of 3,7 Mparts in 2001

Production of 2,5M parts in 2002

CEF 18,4 M€ 19,4 M€ 2,5 years 2,5 years Construction of a trialloop7 jobs created

Trial loopconstructed7 jobs created

Boulevard Sud de St Denis La RéunionBoul. SudPhase 1

17,68 M€ 29,58 M€ 1994-1999

1994-2001

Phase 1 : creation ofa dual way, 7 meterswide on 3,4 km

A 2x2 way, 14meters wide on 3,4km

Phase 2 23,93 M€ Notknown

1994-1999

Not totallycompleted

Phase 2 : creation ofa dual way, 7 meterswide on 3 km

A 2x2 way, 14meters wide, partlycompleted

TotalBoul. Sud

41,61 M€ nk 1994-1999

Not totallycompleted

One of the two industrial projects has been implemented as planned : indeed, MCA evencompleted its investments before the forecasted date. In front of the success of the newRenault's car ("Kangoo"), the firm accelerated its investments. The other industrial projecthad more difficulty in realising as initially forecasted, because of an external factor (thedefault of the main client of OGURA). Indeed, due to commercial orders lower thanforecasted from its clients, the final budget of OGURA's project is eventually slightly inferiorto the initial one, and it seems that they will not be able to complete the whole initial project.

Regarding the CEF, the final cost of the project has been eventually multiplied by 1.5 , butoverspendings have been supported by the private railway equipment constructors whodecided to increase the objectives of their investments.

For the Boulevard Sud project, the development strategies have changed along the projectimplementation, adapting themselves to the evolution of the city's urban developmentstrategy. Problems of land liberation also might have added to these issues.



6.2. Calculation of overall unit costs6.2.1. Actual unit costs compared to those planned

Cost per: (euros) MCA OGURA CEF Boulevard Sud

Gross Job created 45 000 € 128 000 € Not relevant -

Km of dual urbancarriageway

- - - 8 700 000 €

For the industrial investments, the total investment cost per job created varies from 45.000Euros to 128.000 Euros, depending if it is an additional investment in an existing unit (MCA),or a completely new unit (OGURA).

The efficiency analysis of the Boulevard Sud in Saint-Denis shows the difficulty to deal withan urban project which underwent several evolutions, for a satisfactory final result but a unitcost certainly superior to the initial forecasts.

6.2.2. Actual unit costs compared to available benchmarks

Cost per: (euros) Case studies average cost BenchmarkJob created in industry 86 500 85 000Km of dual urbancarriageway

8 700 000 Between 6 000 000 and9 000 000

In previous regional programmes evaluations (Objective 2 Région Franche-Comté and RégionCentre), we had obtained through several final beneficiaries enquiries, the ratio of 85.000 €per job created in industry for the period 1994-1999.

As for carriageways in urban areas, the unit costs varies, according to other studies in France,from 6 to 9 M€, depending on the nature of the site and urban integration. In Saint Denis,there were no specific technical difficulties, but a high degree of urban integration with cyclepaths, pedestrian paths and a high density of crossroads.

6.3. Conclusions on efficiencyThe case study of Boulevard Sud de St Denis illustrates the difficulty to overcome theevolution of a project along time. The initial project has been designed twenty years ago. Atthe time of the preparation of the SPD in 1994, the project was partly under construction andthe following phases were included in the document on the basis of the initial financialquantification. But the works scheduled were not a functional section. At this time, the projectwas studied at its preliminary stage (avant-projet). When detailed design was completed, newrequirements were asked for urban integration and a new road profile was adopted, which ledto different planning and higher costs. However, we can say that the new road profile and thegeneral urban integration that have been done, are fully adapted to the city needs.



The lesson to be drawn from this case study is that projects must be studied in details anddiscussed between public partners at the right time, on the basis of functional sections beforeprogramming decision.

As for the investments in industrial sectors, the realisations and results are in accordance withthe initial objectives, even if the investment was lower than scheduled for one of them, due tolower opportunities on the market. The cost per job created is in the average of the unit costsin such investments. We have to point that both projects were accompanied by a strong effortin workers' training.

The investment in technology and research through the railway trials centre illustrates thecapacity of the private sector (Siemens, Alsthom, Bombardier) to invest in common trialfacilities, reinforcing the railway industrial cluster (5000 jobs) in the area.



7. IMPACT

7.1. Evolution of context from 1994 onwardsThe macro-economic analysis of the evolution of the various Objective 1 regions can not becompletely homogeneous for the following reasons : the macro-economic data beyond year1998 are still unavailable for the overseas departments; on the other hand there are noindicators of GDP for the employment zones inferior to the regional size (Hainaut français).

Nevertheless, as for the GDP, we propose the comparison produced in the beginning of thereport on the GDP per capita, according to the European indicator. If there is indeed aprogress of the GDP in every region in absolute value, the relative progress per capita withregard to the European average is weak.

GDP per capita (in Purchasing Power Standards) in the French Objective 1 regions (1994-1999)

Region 1994 1995 1996 1997 1998 1999 Evol.1994-99

CORSE 82 79 76 76 78 81 -1%(NPC the whole region) (82) (82) (85) (82) (79) (80) -2%GUADELOUPE 40 56 56 56 56 56 (e) +40%MARTINIQUE 54 63 64 63 63 64 (e) +19%GUYANE 48 59 53 51 51 51 (e) +6%REUNION 46 53 52 51 51 51 (e) +11%Obj. 1 FRANCE 52 60 59 58 58 59 +14%UE-15 100 100 100 100 100 100Total Objective 1 (89-99) (1) 68 69 69 70 71Total Objective 1 (1994-99) (2) 69 70 70 70 71

(1) Only the regions under Objective 1 for the whole period(2) Regions under Objective 1 from 1994 to 1996 (including Abruzzes)(e) : estimationsSource : Eurostat

GDP per capita (PPS) in the French Objective 1 regions, 1994-1999, UE15=100

0

10

20

30

40

50

60

70

80

90

1994 1995 1996 1997 1998 1999

Nord Pas deCalaisCorse

Guadeloupe

Martinique

Guyane

Réunion

Source : Eurostat



Regarding employment, we have gathered the following information :

Evolution of the unemployment rate between 1994 and 2000

Region 01/01/1994 31/12/2000 EvolutionCorsica 12,1 9,6 - 21%

NPC Objective 1 area 19,0 15,7 - 17,4%Réunion 38,0 36,6 - 4%Guadeloupe* 26 26,1 =Guyane* 23 22,0 -4%

Martinique* 25 27,7 +10,8%France 12,4 10 - 19,3%

*DOMs : estimations for 2000Source : INSEE, EUROSTAT

Employment growth between 1994 and 1999

Region 1994 1999 EvolutionCorsica (1993) 86 022 97 107 + 12,9%NPC Objective 1 area 226 663 254 141 + 12%Réunion (1993) 167 546 173 677 +3,7%Guadeloupe (1993) 129 700 125 245 -3,4%

Guyane (1993) 34 650 43 443 +25%Martinique (1993) 119 680 116 067 -3%France 22 021000 23 261 000 + 5,6%Source : INSEE, estimations of employment 1993 and RGP 1999

We can notice that the performances of each region in terms of job creation are higher thanFrance's; however, for La Réunion, as the active population increases more quickly,unemployment does not encounter the strong diminution that can be noticed at national levels.

7.2. Contribution of SPDs to the achievement of targetsAs we have already pointed in the effectiveness appraisal priority objectives were notquantified in the SPDs. Consequently it is not possible for the ex post evaluators to evaluatethe contribution of SPDs to achievements of targets not defined.

We give hereinafter an evaluation of the impact on job creation, but we cannot compare withtarget figure.The contribution of SPDs in regional development could be assessed also by the share of theinvestments completed by the programme with the total gross fixed capital formation in theregion during the same period. We were able to make this calculation for La Réunion.

All public and private subsidies in the Objective 1 programme between 1994 and 1999represented on average 18,6% of the region's gross fixed capital formation (GFCF).



Programme share in regional GFCF between 1994 and 1999 – La Réunion

Programme year 1994 1995 1996 1997 1998 1999 1994-99average

Regional GFCF* 1056 1138 1182 1161 1134 (e) 1134 (e) 1134 (e)SPD's annualallocations** 171 186 206 219 232 253 211Programme sharein regional GFCF(%)

16,2% 16,3% 17,4% 18,9% 20,5% 22,3% 18,6%

Source : SPD, INSEE* in M€** including all funding (national and community subsidies, and private funding), in M€, according to the initial SPD.

According to INSEE estimates (as quoted in the ESF Final Report), one third of these 3000jobs each year could be attributed to the help of the structural funds. Our own calculationherein after confirms this estimate.

This confirms that the programme's contribution to the island's relative dynamism in terms ofjob creation was significant through its medium and long-term effects via productiveinvestment.

It should also be noted that apart from the European programmes, major national measuresalso aim to promote regional employment. These include the so-called "Perben" law of 1994(which reduced social charges), and the Loi d'Orientation sur l'Outre-Mer of 2000. Thesemechanisms also help to create jobs.

7.3. Impact on employment

7.3.1. Indirect employment

The assessment18 of indirect jobs linked to the creation of new jobs in the privatemanufacturing sector over a regional territory can be evaluated as follows :

- the indirect jobs of the suppliers – these depend directly on the level of externalisation offunctions and on the integration of the "value chain" over the territory. They can varyfrom 0,5 to 2 jobs per direct job created, depending on whether it is an isolated enterpriseor a leading enterprise structuring a chain of suppliers around itself. We can retain herethe figures of 0,5 for SMEs in the DOMs and 1 for the industrial investments in Nord Pasde Calais;

- the jobs induced by new employees household consumption over the territory – estimatedbetween 0,1 and 0,2 jobs by direct and indirect jobs created on the French continentalterritory, they must be reduced in the overseas departments where consumption partlygoes to imported goods.

- jobs in the non-market services linked to the settlement of new families – it is estimated to0,3 in a region where there effectively exists a positive migratory flow due to this new

18 See research works by B. Reverdy, laboratory IREPD, Université P. Mendès-France, Grenoble, 1998.



implantation. In the Objective 1 regions, this effect is non-existent, except maybe inCorsica where skills are sometimes missing.

Consequently, we can estimate the indirect jobs created as follows :

- Nord Pas de Calais : 1,4 per direct job- Overseas departments : 0,7 per direct job- Corsica : 1 per direct job.

7.3.2. Deadweight assessment

We assume that deadweight is variable in those Objective 1 territories where the decision toinvest from the private sector often takes into account public support. In fact, we know fromthe Thematic Evaluation of Structural Fund Impacts on SMEs (1999), that each countryknows a certain proportion of deadweight in its investments (from this evaluation, in France,it would be about 29%).

Entrepreneurs who invest in Objective 1 regions do so because they know they will be helpedin the long term. They also have in mind that support activities in their environment andvarious other externalities will be helped (sub-contractors, education, vocational training,infrastructures, services to enterprises...). Moreover in the DOMs, there exists a direct aid by"detaxation" of the incomes induced by the investments in those territories.

This guarantee of public support (among which the structural funds) in the long term takespart in the decision of investing in this region rather than in an other one, for exogenousinvestments or local investments which could have the choice of the localisation of theirinvestments. In that sense, for this category, we assume that deadweight must be weaker thanin Objective 2 regions for example.

We propose then to retain a "modulated" deadweight for the various French Objective 1regions, on the basis of the observations of the Thematic Evaluation of Structural FundsImpacts on SMEs.

% of deadweight

DOMs (situation comparable to Greece) 6%

Corsica (situation comparable to Portugal) 18%

Nord Pas de Calais (situation comparable to Belgium) 23%

A deadweight of 6% means that only 6% of the project holders would have launched theirproject in the absence of public allocations. A deadweight of 23% shows that manyentrepreneurs ask for support whilst this support does not influence their decision to invest.

7.3.3. "Bottom-up" assessment of the impact of the programme on employment

The NPC efficiency analysis has given a result of an investment of 45 000 to 128 000 € perjob created. That leads to 1,76 job created per 1 Million of French Francs invested by the



firms. A ratio of 1,8 job per MF was the result of previous efficiency analysis19 in regionsCentre and Franche-Comté Objective 2 final evaluations in 1999-2000. In tourism, we hadobtained in these evaluations a ratio of 1,5 jobs per MF invested.

Applying these ratio to the total amount of the investments completed along the Objective 1programmes, we reach the following job creation :

Region Nb of directjobs created bythe programme

Nb of indirect jobscreated by theprogramme (1)

Deadweight (seeabove §7.3.2.)

Total

Nord Pas de Calais 3220 (2) 4508 23% 5 951

Corsica 1030 (3) 1030 18% 1 689

Réunion 2950 (3) 2065 6% 4 714

TOTAL 7200 7603 12 354(1) Calculation by Reverdy Associés, see above § 7.3.1.(2) Results DRIRE NPC(3) Estimation Reverdy Associés

When comparing these data with the overall job creation over the period in the Objective 1regions (see table in § 7.1.), we can notice that the programme would have contributed to thecreation of about one fourth of the jobs created in French Hainaut, 15% in Corsica, and morethan ¾ of jobs created in La Réunion.

7.4. Conclusions on impact

Key questions on impact

• What was the overall impact of the Structural Funds on supporting regional convergenceduring the period 1994-99 ?

As already pointed in the key questions related to effectiveness, the structural funds haveachieved their objectives in improvement of qualification and external opening up of remoteregions. They have also generated strong effect on employment in all regions. In NPC andCorsica the employment growth has been twice the value at national level, and unemploymentrate has decreased in the same proportion. For the overseas departments, convergence is stilldifficult to reach due to the growth of population and to structural weakness.

• What were the economic effects of the Structural Funds investments in terms ofconvergence of income levels ?

In Corsica and French Hainaut (NPC), income levels have reached the average national level.In the overseas departments it is the national legislation regarding the low wages whichobliged to increase the incomes.

• What has been the impact of Objective 1 Expenditure during the period 1994-99 in theMember State (or region)? This should be widely considered and consider key interests(economic and social cohesion, transport, SMEs, research and development, educationand training, rural development)

All these points have been detailed in effectiveness key questions.

19 by Reverdy Associés



• How lasting is the effect ? Will the benefits of Structural Fund expenditure still be feltafter the money is spent ?

Direct and indirect jobs we have estimated above are in the competitive sectors (industry,services and tourism). They are now independent of public supports but depending from themarket health.We think that effects are sustainable in French Hainaut and Corsica where it has been provedthrough the use of the structural funds that it was possible to move. Entrepreneurial spirit hasbeen recovered.For the DOMs we have noticed that a lot of projects have been implemented in La Reunionwith good results in agriculture, food processing, fishing sector and handicraft. But the privateinitiative has some difficulties to find competitive investments to insert the local economy inthe European trade exchanges or in the South Indian Ocean region.

• Have any unintended effects been observed ? What were these ?No important effects.

• To what extent have the Objective 1 programmes contributed to a greater territorialbalance :Within Member StatesWithin individual regions

Greater territorial balance within France has been achieved mainly in French Hainaut andCorsica and partly in the other regions.Within the regions themselves, we have observed in Corsica and Reunion a better distributionof projects between the coastal areas and the mountainous districts. Rural development,ecological measures on soil and forestry and new forms of tourism have allowed jobopportunities in the remote places in the interior of these islands.

• Through what channels have the EU structural funds impacted on the regional economiesand how powerful has this been ?

Three channels have been used :- the public one through improvement of infrastructure and education facilities,- the private one through training offer and support to private investments,- the solidarity and collective initiative channel in urban districts and rural areas (alternative

economic funds, rural cooperatives).

• Which channels have proved most effective in securing successful and sustainableimpacts ?

The three channels mentioned above have been effective in their own field.

• What factors have most influenced the impact of Objective 1 ?Impacts of Objective 1 have been influenced by the external favourable economic context inEurope during the last years of the programme. But we can say that the programme has givento these regions the opportunity to participate in this growth.

• What has been the impact of Objective 1 in different contexts ?It is obvious that immediate impact in terms of employment is higher where possibility ofphysical integration within the European market exists as in French Hainaut and Corsica. Thesituation is different in the overseas departments where the effects can only be experienced ata longer term and insofar as a real specific development strategy is progressively established.In La Réunion where reactivity is strong, many jobs were created in SMEs and in particular intourism.



• To what extent has the operation of Objective 1 affected the location decision of firms ?Location decision in French Hainaut have been certainly influenced by public supports sincetwenty years and not only by the structural funds. Location decision of firms in Corsica inmainly due to the "continuité territoriale", that is to say French national support to decreasethe cost of transportation from the continent to the isle.



8. MANAGEMENT AND IMPLEMENTATION SYSTEMS

The European Objective 1 and 2 programmes management in France does not belong to thecentral level, but rather to the regional levels.

At a central level for Objective 1 Programmes, a coordination and monitoring work was heldby the DATAR20 (for Nord Pas de Calais and Corsica) and the Secrétariat d'Etat à l'Outre-Mer (for the overseas departments). Then in each region, State representatives and regionalauthorities were in charge of daily managing, implementation, monitoring and evaluation ofthe regional programme.

Within the framework of this ex post evaluation, the European Commission chose to have acloser look to the programme management and implementation systems in the island ofRéunion.

We cannot draw conclusions from this region for the French Objective 1 programme as awhole, due to the specificity of the regional organisation adopted there. However, we considerthe case of Reunion as an example of good practice in terms of management andimplementation systems.

8.1. Institutional arrangementsA special organisation was set up in La Réunion to implement EC programmes. It differsslightly from the forms of organisation in the other regions. This organisation is presented inthe 1994-1999 "procedures book" elaborated in La Réunion.

8.1.1 Programme management structure

The organisation is illustrated in the following diagram:

20 DATAR : French governmental agency for territorial development

Local Monitoring Committee

Vetting services Tripartite managementagency (AGILE)

Préfet derégion

Président duConseil Régional

Président duConseil Général(Département)

Representatives ofCentral Government

AgenciesNational Monitoring CommitteeEuropean

CommissionRepresentatives



• The Programme Management Committee (called in La Réunion "NationalMonitoring Committee") is the decision-making body that :

- makes progress reports on the programme,- oversees the implementation of the strategy defined in the SPD,- decides on necessary modifications in order to increase the programme

effectiveness (such as deflating coefficient, changes in schedule of payments,changes in measures),

- decides intermediate evaluations.

The Committee meets every semester.The particular feature of European programmes in La Réunion comes from the factthat the Monitoring Committee has been co-chaired since 1994 by the Prefect, theChairman of the Regional Authority (Président de Région) and Chairman of theGeneral Council (Président du Conseil Général).Representatives of the European Commission and of central government agencies alsohave their seat in the National Monitoring Committee. Representatives from the socio-professional sector (Consultative Committee of the Regional Council, trade and craftchambers, Mayors Association) are also present since 1997-1998 in the CNS, whenthey were only associated to information meetings in the first years of programming.

The average number of people attending the Monitoring Committee meetings wasbetween 60 and 70.

We assume then that the organisation retained in La Réunion is good for a rallyingpartnership (mobilizing all the regional energies).

• The Local Monitoring Committee (CLS) is the agency responsible for programming.It meets at least once a month. The three partner institutions (SGAR, GeneralDirections of the Region and the Department) and representatives of the vettingservices and of the technical services of the regional and departmental authorities takepart in its meetings.

It approves proposed projects and defines the way in which they are to be financed. Itproposes to the National Monitoring Committee the necessary adaptations to theprogramme, and approves the monitoring reports. It makes sure of the appropriatenessof the results compared to the objectives, and implements the evaluation processes.

The Local Monitoring Committee is assisted by a secretariat responsible for thepreparation of documentation, monitoring, reports, agendas and reunion reports.

• The vetting services (State services, as well as regional or departmental services,chosen by the National Monitoring Committee measure by measure) examineapplications for support with a view to presenting them to the Local MonitoringCommittee (examination of applications, collection of supporting documents). Onbehalf of the Prefect, they monitor committed funds and certify completed activities.

• A tripartite management unit had been set up in 1990 by the three partnerinstitutions to provide secretarial services for the Committees, produce progressreports and assist the services with regard to implementation. This unit, the Agence deGestion des Initiatives Locales en matière Européenne (AGILE – Local Initiatives



Management Agency) consists of managers from each of the partner institutions. Itsresponsibilities are defined by the Local Monitoring Committee, but it is under theauthority of the SGAR. Its role and missions have been detailed in 1994 (and in 2000).

The unit's financial resources are covered by national and local funding as well as bytechnical assistance credits of the Objective 1 Programme. However, AGILE does nothave any authority to commit public funds. Commitment of funds, invoice checkingand certification procedures are the responsibility of the SGAR and vetting services.

Advantages and disadvantages of this structureThere are many advantages:

- equal involvement of the three partners in coordinating the programme via the co-chairing arrangement,

- equal and permanent information provided to the three partners concerningprogramme progress, relations with project promoters, and use of credits via the singleunit AGILE,

- considerable regularity in examining applications and monitoring by the monthlymeetings of the Local Monitoring Committee since 1994, which thus gives an overallrhythm. As Permanent Commissions of the two authorities (Region and Department)meet simultaneously every month, decisions on public matching are taken promptly,

- no "pre-committees" but a single location for programming, where the three partnersreceive identical information. This leads to greater confidence between them. Thebenefits of partnership mean that difficulties can be faced more easily.

However, there are certain difficulties:

- technical assistance resources have been concentrated in a system for monitoringmanagement and proper administrative procedures, at the expense21 of time spent oninformation and project initiation, or even on strategic thinking. Some vetting services(Regional Directorate of industry, research and environment; Tourism) are too busywith administrative aspects and no longer have time to help good projects to emerge.One major problem seems to be the quick turnover of national civil servants thatprevents a long term management (this is especially penalizing as the managementstrongly depends upon individuals),

- it was only in 1998 that the National and Local Monitoring Committees looked into"sleeping" (dormants) projects, which led to the late deprogramming of some projectsthat had not really been started. It seems easier to deal with new projects instead ofmonitoring the projects which suffer delays or without real project holder.

21 according to certain people interviewed



8.1.2. Other groups involved

In the first years of the programme, each meeting of the National Monitoring Committee waspreceded by an information reunion gathering all partner organisations (Chambers ofCommerce, Association of Mayors, …) about three weeks before the Committee.

The information was delivered to representatives of socio-economic organisations, inparticular local chambers, which were very involved in project implementation. Trade andcraft chambers indeed were involved regarding vocational training, but also projects in thesector of ports, airports and development of paths.

The socio-economic world was represented within the National Monitoring Committeethrough the representation of the CESR (Regional Economic and Social Council), but thesepartners were not associated to the Programming Committee (CLS) as they were among themajor beneficiaries of the programmes.

Since 1997-1998, the socio-economic partners have wished to take a fuller part in the CNSand have then been associated to the plenary sessions of the CNS (in place of the former modeof participation).

8.1.3. Vertical and horizontal partnership

Vertical partnership : the implication of the EC in the Programming Committee wasparticularly seen as positive, as concrete answers were given rapidly, and the ECrepresentative was able to commit himself (and the Commission) on problematic issues. Itwould less be the case on the new programming period.

Horizontal partnership : the implication of the socio-economic representatives in the NationalMonitoring Committee enabled them to bring the information to potential project holders.

8.1.4. Management capacity in 1994

The management and monitoring system set up in La Réunion from the beginning of theprogramme was somehow precursor at a national level, what explains its relative stabilityalong the programme. It was based on some strong principles, established on the experienceof the previous generation of programmes :

- a partnership principle, that was translated in AGILE, placed under the functionalauthority of the General Secretariat for Economic and Regional Affairs (SGAER);

- a principle of programming common to the three structural funds and the FIFG, througha unique Programming Committee;

- an early computerization of the programmes management, with a database calledPLEIADE (originally developed by the European Commission and locally adapted). TheESF too was monitored through a national database from 1998;

- a unique vetting service for each measure.

8.1.5. Development of management capacities from 1994 to 1999

The organisations' capacities in terms of management and implementation were good. Theyimproved during the programme through efficient learning of procedures.



In terms of Sufficient Only withdifficulty

Notsufficient

Evidence base

Time x According to AGILEKnowledge x According to AGILENumbers of staff x According to AGILE

The publication of the Prime Minister instruction of 12 May 1998 concerning thereinforcement of the processes of management, monitoring and control of programmescofinanced by the European funds was only a confirmation of a system already largely andformerly structured. For the two remaining years of implementation, the main impacts of thisinstruction were as follows :

- regarding the unique vetting service : where possible, nomination of a State decentralizedservice instead of the Local Authorities;

- regarding the involvement of the local paymaster, there was a systematic transmission offiles to the public accountant, with a role more concentrated on the examination of thefiscal and social situation of the potential beneficiary;

- regarding the computerization of programmes management, the PLEIADE software gavesatisfaction in the preparation of audits, and was improved so as to identify the "sleeping"projects.

Capacities in terms of evaluation somehow remained low. The intermediate evaluationproposed methods for monitoring indicators that were not put into effect.

8.1.6. Change in practices in the framework of the new 2000-2006 programme

The new programme saw the arrival of the Présage software, which in theory enablesapplication files to be networked and gives everyone direct access to information. It shouldalso be a good way of monitoring indicators, provided they have been well defined andquantified at the outset, which would be the case for 2000-2006.

On the other hand, the partners are worried by the changes in requirements from theCommission and French financial regulations (ERDF and regulations of March 2001,expected Prime Minister instruction replacing that of 199822). The local partners areconcerned by the lack of continuity on the part of those they deal with, by the lack ofdefinition of rules, or by the fact that the rules were defined after the beginning of theprogramme.

8.2. Project selection processThe project selection process was as follows : 22 Four instructions have been published by the French government in the second semester of 2002 :- 15 July 2002 : Prime Minister instruction for the improvement of the system of management, monitoring and control of

programmes cofinanced by European structural funds- 19 August 2002 : Inter-ministerial instruction for the simplification of the structural funds management- 27 November 2002 : Inter-ministerial instruction for the simplification of the structural funds management- 24 December 2002 : Prime Minister instruction for the simplification of the structural funds management



• At the SPD level, the forms of action were chosen after a debate on theirappropriateness with regard to the strategy. Some of the large projects were evenselected according to their state of progress or their performance with regard toachievements. They were then registered in the SPD.

• As for support to the private sector, the forms of action were chosen at the SPD level;then, if the project holder corresponded to the eligibility criteria, only its economicwealth would be scrutinized. There was no other selection at this level. The vettingprocess focused on project eligibility and examination of the financial, legal andadministrative documents. Programme officials did their best to provide equal access toinformation and equal treatment with regard to financial support.

• Some projects related to the public and community sectors were subjected to anappropriateness examination with regard to the results expected by the project holder,and with regard to strategy.

No call for projects was launched during the programming period.

It took an average of 6 months for a project to be approved : the vetting services (DRIRE,DRAF, DRTEFP, DRT, etc.) considered the appropriateness of a project within the context ofthe SPD strategy and its eligibility with respect to public aid.

The secretariat of the CLS (AGILE) was then in charge of this eligibility assessment withregard to the technical content of the files, to the conditions of implementation (projectholder's capacity) and to the rules of intervention of the SF (call for tenders, combination ofaids)…

This practice however prevents new project promoters from being identified and questionsbeing raised on the non-use of some subsidy lines. It is clear that projects progress whenowners have project managers with the rights skills and spirit of initiative. In the case of "LesHauts" area (the mountainous area in the centre of the island), the Commissariat àl'Aménagement des Hauts has fulfilled this role of providing incentives and back-up to helpprojects to emerge.

The system seemed to be well accepted by the participants, as very few complaints werelodged.

8.3. Financial systemThe 1994-1999 programme does not appear to have suffered from the financial managementsystem of the European programmes. Of course, the complexity of the procedure means thatthe structural funds are presented with large dossiers, with project owners who provide all thenecessary financial guarantees.

Small organisations have been assisted by a pre-financing system set up by the Region and theDepartment. However, organisations offering vocational training and coordination in thesolidarity sector have experienced considerable difficulties through lack of working capital.The situation is getting worse on the new programme, as there is no more possibility ofadvance.

The monthly rhythm of the local committees and regular meetings of the permanentCommissions of the regional assemblies, have also helped to avoid cumulative delays inexamining applications.



Programme coordinators were very much in favour of the facilities offered for re-programming within the context of strict but clear rules. They feel that this is no longer thecase today in the new programme which would be more rigid.

With regard to control, the final statements drawn up for the final report of each fund wereavailable. The control activity thus checked 11% of total eligible expenses for ERDF, 2,5% oftotal expenses for EAGGF, 3,32% of the total envelope for ESF, and more than 5% for FIFG.The programme managers would have wished a greater coordination between the controls. Asno control is irreversible, the services feel that they have to keep the accounts available for 13years, which is very constraining.

Each regional examining body is now obliged to make a distinction between its sectionsresponsible for file examination, management and control.

8.4. Monitoring structuresThe monitoring system has particularly improved during the implementation of theprogramme (for instance in 1998, with the taking into account of "sleeping" projects). It isnow well in place with the Présage system. While financial data for each project can be easilyaccessed, the content of the achievements is not clearly identified in the data base. This shouldchange completely with the new Présage system in service for the 2000-2006 programme.

The monitoring systems were effective enough in terms of financial data; however, as forevaluation, continuous monitoring efforts were not made in terms of outputs and results :selective quantifications were made in the occasion of the evaluations, but not at a regularfrequency.

8.5. Programme evaluationAn intermediate evaluation of the programme was performed. This concentrated on thefeedback of information to help in determining indicators. Unfortunately, key data were notrecorded subsequently and the final evaluation produced in 2001 could not be finalised due tothe lack of data collected. No university research work was done on this programme but somethematic evaluations were undertaken (on the export sector, or the PLIE -Local Plans forReinsertion). The various services consulted are aware of the need for evaluation but they didnot have enough time between the end of this programme and the following one to step backand collect a minimum of quantified data.

Due to the other constraints of programme management, evaluation would then be the lastpriority, taken into account only when there is some time left.

8.6. Synergy effects- Internally, the most obvious synergy is between training activities and all the other

components. The increase in qualifications is recognised by all as a basis for development.

- Externally, the programme was directly linked to other strategies, such as the Contrat dePlan Etat-Région (CPER), the Community Initiative REGIS II, or the Multi-annualGuidance Programme for Fisheries (MAGP). There are obvious complementarities withthe CPER and the other strategies. All the interviewees recognised that the European



programmes set the pace, making it compulsory to reach decision on time and harmonisepolicies.

8.7. Equal opportunities and the environment- Globally, the actions and measures cofinanced by the Structural Funds and the FIFG were

compatible with the Community priorities in terms of equal opportunity between men andwomen, and they occasionally contributed to them, even if the outputs and resultsindicators are very rarely expressing the share of women beneficiaries. The theme of equalopportunities was more expressly taken into account in the REGIS programme.

- The programme respected the sustainable development principles and objectives,expressed in the "Community Programme of policy and action in terms of sustainableenvironment" and repeated in the Council regulation of February 1993 ; it also respectedthe Community rules in terms of environment. Priority was given to the realisation of theobjectives of this regulation, insofar as it was linked to the regional developmentforecasted.

8.8. Conclusions on management and implementation systemsThe management system set up in La Réunion is more effective than other systems that wehave evaluated in mainland France. This is true mainly thanks to AGILE unit that makesinformation available to the three partners. It is also true thanks to the monthly rhythm ofmeetings of the Local Monitoring Committee that the partners have introduced. Noapplication is delayed by having to wait for successive programming commissions orpermanent commissions of regional assemblies.

At a French level, the example of La Réunion prompts to create a unique monitoring unitshared between the State, the Région and possibly the Département. The good results in LaRéunion also come from a good articulation between the decisional political structures(Conseil Régional et Département) and the decentralized State services in charge of animatingand vetting the programmes (DRTEFP, DRIRE, DRAF, DR Tourisme et Artisanat…). Thisarticulation is to be sought after in all the other regions where State services too oftenconsider themselves only as services examining the aid applications, and do not considerthemselves as having to participate in projects generation. Moreover, the animating units inthe SGAR often have no information about realisations in the framework of the ESF (as theESF funds are administered by the DRTEFP services) and this leads to a less efficientapproach.



9. STRENGTHS AND WEAKNESSES, 1994-1999

9.1. Process issuesThe common points to all the French Objective 1 regions are the following :

Strengths Weaknesses

Programming External factor : the decentralization ofthe issues of education and vocationaltraining to the regional authorities (lawof 1993) was an asset.

The partnership between the publicbodies involved is an asset in terms ofprogramming. Good appropriateness tothe local context mainly where they tooktime to prepare a common regionalstrategy as it has be done in Corsica in1993.

Delays in closing the 1989-1993programmes in the DOMs hadconsequences on the beginning of the1994-1999 programmes.Poor integration between the differentstructural funds.The DOMs seem to have lacked of anin-depth strategic analysis of theirterritories' contribution to the Europeanmarkets, and of their integration within aregional economy (Indian Ocean orCaribbean).In general, financial targets guidedreprogramming (funds consumption)and poor attention was devoted tostrategy or effectiveness of outputs.

Partnership A good partnership between State andRegional Authorities. In La Réunion, thetype of partnership between the threepublic bodies involved (State, Region,Department) was an asset in terms ofprogramming, implementation andmonitoring.

However, the consensus reached in thisway (La Réunion) no doubt preventsfundamental issues from being examinedwith a critical mind.In some regions there seemed to be fewdebate with economic players and civilsociety about the main issues related tostructural funds and economicobjectives.

Implementation The programmes had an undeniablelearning effect on the public actors, interms of management and multi-annualprogramming.Diffusion of public procedures, whichnow are largely prevalent.Significant improvements in managingthe structural funds and promotingcontrols in conformity to ECrequirements.

The programmes started lately in manyregions. "Counter" logics at thebeginning of the programme in someregions, and somehow a weakexamination of the project holders'management capacity or financialcounterparts (NPC and West Indies).Concerns about the accumulation ofregulation and instructions for themanagement of structural funds, thatmonopolize great part of the programmeleaders' time.

Monitoring/evaluation

Diffusion of culture and methods ofmonitoring and evaluation, but resultswere obtained mainly in financialmonitoring.Fortunately, Single Programming

Very few quantitative data on outputsand results was available at a territoriallevel (even when monitoring indicatorshad been initially identified). Thedifferent vetting services sometimes



Documents for the period 2000-2006 aremore accurate as regards monitoring andindicators for future evaluation.

produced information but it was notcentralized at a regional level. Theevaluators thus lacked quantitative datafor the effectiveness analysis.Insufficient numbers of officials forqualitative monitoring and evaluation.Globally, the lack of information left bythe monitoring system and the scarcityof evaluation analysis makes it difficultto undertake any readjustment or lookfor better projects.

9.2. AchievementsGlobally, the objectives in terms of realisations have been honoured. This was made possiblemainly by a strong mobilisation during the last years of programming, and the postponementof the completion date.

Strengths Weaknesses

Employment Results in all the regions.Training of a large number ofunemployed ; implementation of newinterventions for insertion and equalopportunity.

Transports Results mainly in the DOMs

Sustainable means of publictransportation have been settled in LaRéunion

In other regions weak approach in thisfield

SMEs Results in all the regions. Outputs are less obvious in the WestIndies, hence expressing the persistingdifficulty of these territories to find theirplace within the trade exchanges withmainland France and with Europe.

R&D Some results in NPC and Corsica

Education andtraining

Results in all the regions

Ruraldevelopment

Good results in La Réunion and Corsica

Fisheries Blockage in Corsica, La Réunion andthe DOMs within the MAGPnegotiations, with no sufficientallowance made by French andEuropean authorities to the specificitiesof the insularity of these Europeanregions.



Tourism Corsica and La Réunion have developedtheir own approaches of tourism whichproduce first results

In the other islands, tourism has notgiven the expected results.Actions implemented have not beensufficient to prevent the decrease ofattractiveness of the West Indies.

Environment Requalification of industrial fallow landsin NPC

Priority given to water provision in theDOMs

Household refuse processing delayed inother regions

9.3. Overall efficiencyActual unit costs we have studied are in the brackets of benchmark projects. The case ofBoulevard Sud in Saint Denis, La Réunion, shows the necessity to present projects byfunctional sections and to reassess these projects if there is a revision of strategy during theperiod, which was the case in La Réunion.



10. CONCLUSIONS

10.1. Conclusions for the 1994-1999 periodEffectiveness and impactsThe macro-economic results are very positive in terms of economic growth (regional GDP)and in terms of employment for all the regions.

Each region has been able to prepare a strategy relevant to its initial context.

For the overseas departments, the result is visible in terms of infrastructure. The networks ofairports, roads, high schools, water supply and the protection of the environment have caughtup with the levels found on Continental Europe. This is also true for public services such aseducation, health, transportation, security, food tracebility and accessibility. However, theresults are less obvious in the economic sectors, which shows how difficult it was for theseterritories to carve out their place within the trade exchanges with mainland France andcontinental Europe.

In La Réunion good results have been achieved in the agriculture sector (filière). High levelsof self sufficiency have been attained for staple products such as meat, dairy production andfruits. Food processing units have been developed for exportation and the sugar cane industryhas reached its level of sustainability.

As for the Nord Pas de Calais region and Corsica, they have proved they can create andsustain competitive activities and jobs. In Corsica the development strategic plan, elaboratedin 1993 and actualised in 1999, was the base of the SPD preparation in 1994 and in 1999 (forthe new programme) - thus an existing clear strategy has been an advantage for thepartnership at national and European levels.

Added value of the Structural fundsThe added value of the funds was not only significant in terms of leverage effect on publicand private investment, but also because of the obligation to follow the agenda of theEuropean Commission (adopting a common strategy between public actors, multi-annualprogramming system, monitoring and evaluation).

The information and promotion around the eligibility of a region to the Structural Funds leadthe region's representatives to invest their time and effort in these programmes to answer thepopulations' concerns about unemployment and the levels of basic infrastructures. Thequalification of a region with regard to Structural Funds gives an impulse to the economicoperators as a whole, as they know that their territory will benefit from priority investmentsfor at least 6 years.

10.2. Extent to which strengths and weaknesses have been taken into account in 2000-2006 programming

10.2.1. Strengths built upon

In general the strengths of the previous period 1994-1999 have been continued and reinforcedin the following programme:



• Strong common strategies adopted between the State and the Regions, reinforced bythe fact that the French government has decided to adopt the same agenda for its ownprogramming agreements with the Regions (Contrats de Plan Etat-Région)

• The experience of partnership tested in La Réunion which involves the Region asmuch as possible in the decision and implementation process, has been extended to allthe regional programmes financed by the structural funds. Indeed, Corsica hadmaintained since the PIM (Programmes Intégrés Mediterranéens) of 1986 apresidency of the Monitoring Committee co-chaired by the Préfet de Région and thePresident of the Local Authority (CTC). Corsica has then adopted an organisation verysimilar to the one of La Réunion, with a unique European agency (cellule) in order tomanage the processes and to raise new projects.

• The learning effect of management by project and multi-annual programming hascontinued on the new programme.

10.2.2. Weaknesses addressed

Some previous weaknesses are now addressed:

• Single Programming Documents for the period 2000-2006 are more accurate interms of monitoring and indicators for future evaluation, in particular with thecommon setting up of the "Presage" model. Nevertheless the absence of a finalevaluation for the programme 1994-1999 has prevented to draw the lessons frompast experience.

• These last years, juridical and administrative environment of structural fundsmanagement have become more complicated due to new regulations andsometimes contradictory interpretations. Four instructions from the Frenchgovernment have been published very recently (in July, August, November andDecember 2002) to simplify the process of implementation and management ofthe structural funds. This simplification should enable the managing teams tofocus on project generation and selection.

Other weaknesses still remain:

• Few of the new SPDs have studied the impact of the difficulties encountered inthe past programming period on the implementation of projects, on the reductionof the delays to launch new projects or on the generation of new projects indifficult fields, such as the economy of solidarity.

• The outputs and recommendations of the mid-term evaluations are not much takeninto account.

• There are few calling for projects. The projects selection procedure thereforemainly consists in checking the eligibility of the projects submitted. There is nocompetition between several projects. On this subject, the programme managersassume that the project holders are not numerous enough and that it is morerelevant to help them to generate viable projects in first place. After three years ofa slow start of the 2000-2006 programmes, some regions are considering puttingcommon means of technical assistance to the disposal of small project holders.



• In the overseas departments, it seems that a real debate is still missing betweenthe regions, the French government and Europe about the specific place of theseultra-peripheric territories in Europe, and about their contribution to exchangesinside Europe and with other continents. This question was debated in La Réunionin 1993 within the State strategic orientations and in the orientation document ofthe local assemblies called "For an active development of La Réunion". Prioritieson job creation and social cohesion were well identified in these documents. Thecreation of an "activity economy" in the field of environment or proximity serviceswas the object of realisations in the Objective 1 programme, but the strategy ofopening up towards European exchanges or the regional environment was notreally based on an in-depth analysis of the situation.



11. RECOMMENDATIONS

Short termR.1. Improve the culture of evaluation and benchmarking.Among the six French Objective 1 regions, only La Réunion has produced its closing balancereports for 1994-1999 with quantification of the indicators of outputs and results. The otherregions themselves can not have a good knowledge of what was done during the 1994-1999period and, as people move every three years in State administration at regional levels, thereis no memory and no capitalisation of experience during the years. Internal evaluation processmust be rehabilitated so that each participant takes care to present final reports of what he hasdone. Exchange of best practices should be organised by DATAR23 every year as it ispresently done in the exchange fair organised by Datar, OECD and CDC through theInternational Conference on territorial development. Examples from other European countriesshould be invited to such meetings.

Regional scientific resources in economics, social and political sciences could be mobilisedthrough technical assistance support in order to analyse regional evolution, to take part inthematic evaluations and to organise public debates on the best way to use structural funds.

R.2. Improve the ability of target beneficiaries to present their projects to structuralfundsGrant target beneficiaries (local community authorities, economy of solidarity structures,tourism project holders) with means of engineering, expertise and project management so asto enable them to participate in the European programmes more easily and to prepare theirprojects earlier, in order to be ready to start them before the end of the programme.

Find ways of implementing working capital available at a regional level to help some of thefinal beneficiaries who don't have experience enough to engage in projects within theprogramme24.

R.3. Restore beneficiaries confidence by stabilizing and simplifying the legislative andjuridical environment of structural funds management.Significant modifications of the administrative process have been announced through thegovernment instructions issued in the second semester of 2002. This administrative andjuridical environment must be tested and stabilized as soon as possible in order to restore theconfidence of target beneficiaries.

In the same way, it seems necessary that the French government and the EuropeanCommission design specific agreements on fisheries for Corsica and the DOMs that wouldtake into account the islands' specific features (see requirements presented to the EuropeanCommission by Collectivité Territoriale de Corse and Conseil Régional de La Réunion) .

23 DATAR : French governmental agency for territorial development24 In June 2002 for instance, a special fund (for structural funds pre-financing) has been set up by the Agence Française deDéveloppement in favour of the DOMs : it will be an answer to the difficulty of the overseas authorities to mobilize quicklythe European funds for their development projects. This fund allocates loans with a maximum 36 months term.



R.4. Pay more attention to project generation in order to raise the best projectsaccording to the strategyMore information towards civil society is needed. This information could be deliveredthrough the local press for instance. Calls for projects should be promoted in order toencourage more initiatives and generate more innovative projects. First, calls for ideas shouldbe organised - corresponding to the strategic framework defined; then an allocation might begranted to the best ideas, in order to transform the idea into a project eligible for any measurewithin the programme. These calls for ideas might be intended for the local authorities, theiragencies, the operators of social and solidarity economy, enterprise groups, and associationsin general. As for enterprises, they already benefit from well defined State aids and do notcome into this kind of dynamics.

R.5. Ensure the coherence and promote synergies between sectoral components of theprogrammeFor instance agriculture or fishery production are linked to tourist consumption. The tourismdevelopment depends on the quality of infrastructure and public services (transport, waterquality, environment and sanitary conditions). For this purpose, regional authorities mustappoint specific task-force teams to help the generation of specific projects in areas as it hasbe done in the highlands ("les Hauts") in La Réunion.

Long termR.6. Any new regional programme should be built on a clear regional long termstrategy adopted by all the stakeholdersCorsica has been subject to a regional master plan adopted in 1993 by the CollectivitéTerritoriale de Corse and revised in 1999. This plan, which is coherent with the State strategyfor this territory, forms the basis of multi-annual programmes supported by Structural Funds.It has been the same in the Nord Pas de Calais region where the State and the Region havedeveloped, from the seventies onwards, a common strategy of industrial conversion for theformer industrial districts. These overall strategies must be based on independent andcontradictory SWOT (Strengths, Weaknesses, Opportunities, Threats) diagnosis. Civil societyand universities should be associated more with such diagnosis and prospective exercises.These strategies might end up in programmes more focused on priority actions, and avoidspreading European help over a series of measures that would usually be the concern ofnational or regional solidarity.

R.7. For the ultra-peripherical regions design specific European strategies to give thema role as an "active frontier" in their regional environmentThese islands could provide Europe with new opportunities from their regional position closeto other continents. This requires that their regional strategy is not designed only from theirown local resources but with the cooperation of European resources. The Conférence desregions périphériques maritimes (CRPM) has introduced a debate on this issue in Las Palmasin February 2002 : the conclusions of this debate might be taken up again in order to identifyprojects with a real European dimension and to bring investment spin-offs in the long term.



R.8. Provide at regional level a central resource agency to help final beneficiaries toprepare their projectsAssistance should be provided to generate projects which respond to the strategic objectives.Publicity and information should be given to every citizen. Information on best practices inthe region and in other European regions should be available. Expertise and projectmanagement facilities could be financed by technical assistance and delivered free to projectholders. Universities and private consultancy services could also be mobilised throughspecific allocation as the French FRAC (Fonds Régional d'Aide au Conseil) or "PrestationRéseau" both delivered by regional representatives of Ministries of Industry and Research.Every candidate who wishes to submit a project to structural funds would then benefit from alump sum to use such expertise.



ANNEX 1 – LITTERATURE REVIEW

Title Author Date

General information Les départements d'outre-mer aujourd'hui : la voie de la responsabilité - Rapport à Monsieur le Premier Ministre M. Claude LISE, M. Michel TAMAYA juin-99

Les départements d'outre-mer : un pacte pour l'emploi - Rapport remis au Ministre des Départements et Territoiresd'Outre-Mer B. Fragonard juil-99

L'ultra périphérie de l'Union Européenne : Quelles stratégies de développement pour ces régions éloignées ? Europe Locale n°30 avr-02 Outre-mer : le défi des singularités - Rapport du groupe transversal "outre-mer" présidé par Gérard Bélorgey Commissariat Général du Plan janv-93

Rapport de la Commission Européenne sur les mesures destinées à mettre en œuvre l'article 299.2 dans les régions ultra-périphériques de l'Union Européenne Commission Européenne mars-00Circulaire "Amélioration du dispositif de gestion, de suivi et de contrôle des programmes cofinancés par les fondsstructurels européens" Premier Ministre 15 juillet 02

Circulaire interministérielle "Simplification de la gestion des fonds structurels"

Ministères de l'Intérieur, des Affaires sociales,de l'Economie, de l'Agriculture, de la FonctionPublique et de l'Outre-Mer 19 août 02

Circulaire interministérielle "Simplification de la gestion des fonds structurels"

Ministères de l'Intérieur, des Affaires sociales,de l'Economie, de l'Agriculture, de la FonctionPublique et de l'Outre-Mer 27 nov. 02

Circulaire n°4900/SG "Simplification de la gestion des fonds structurels" Premier Ministre 24 déc. 02CORSE

DOCUP 1994-1999 Commission Européenne 1994 Evaluation intermédiaire DOCUP Objectif 1 1994-1999 FERE Consultants juin-97

Synthèse de l'évaluation ex ante du DOCUP 2000-2006Préfecture de Corse - Collectivité Territorialede Corse août-00

"Pour une évaluation plus performante des programmes européens en région Corse : l'exemple des DOCUP", actes ducolloque de la SFE à Rennes en juin 2000 Michel Rombaldi juin-00

GUADELOUPE DOCUP et décision de la Commission y afférente REF C(94)1931 du 29.07.1994 Commission Européenne 1994 Evaluation intermédiaire DOCUP et REGIS II 1994-1999 FERE Consultants juin-97 GUYANE DOCUP 1994-1999 Commission Européenne 1994

Evaluation intermédiaire de la mise en œuvre en Guyane des programmations régionales 1994-1999 cofinancées parl'Union Européenne (DOCUP et REGIS II) Ernst &Young Entrepreneurs févr-98

Synthèse de l'évaluation ex ante du DOCUP 2000-2006 Préfecture de Guyane, Région Guyane sept-00



MARTINIQUE DOCUP et décision de la Commission y afférente REF C(94)1933 du 29.07.1994 Commission Européenne 1994 Evaluation intermédiaire du DOCUP Objectif 1 et de REGIS II 1994-1999 FERE Consultants sept-97 Diagnostic et stratégies du DOCUP 2000-2006 Préfecture de Région et Région 2000 NORD PAS DE CALAIS (French Hainaut) DOCUP et décision de la Commission y afférente REF C(94)1935 du 29.07.1994 Commission Européenne 1994 Evaluation ex ante du plan de développement régional du Hainaut français - Rapport Final BIPE Conseil avr-94 Rapport d'évaluation intermédiaire Programme Objectif 1 1994-1999 ACT Consultants nov-97 Evaluation finale Programme Objectif 1 1994-1999 - Synthèse Run Développement févr-00 Etat des lieux de la zone Objectif 1 dans le DOCUP Objectif 1 phasing out 2000-2006 Préfecture de Région et Région juil-00 REUNION DOCUP et décision de la Commission y afférente REF C(94)1934 du 29.07.1994 Commission Européenne 1994

Livre des procédures pour la mise en œuvre et l'exécution des programmes communautaires 1994-1999 Préfecture, Région, Départementmars 95, jan97

Evaluation à mi-parcours des programmes communautaires à La Réunion 1994-1999 BETURE sept-98

Aéroport de Saint Pierre Pierrefonds - Etude économique et financière actualiséeSyndicat Mixte de Pierrefonds, Départementde La Réunion oct-98

Bilan final FSE 1994-1999 Préfecture de Région juil-02 Evaluation ex ante du DOCUP 2000-2006 Préfecture de Région et Région juil-00



ANNEX 2 – LIST OF CONTACTS AND INTERVIEWS

ETATSophie GUILBOT-CHRISTAKI Chargée de mission DATAR (Délégation à l'Aménagement du Territoire et à l'Action Régionale) 23-mai-02

7 janv.-03Yves BARLIER Ministère de l'Outre-Mer 7 janv.-03

Geneviève BARIL Département Affaires Européennes Direction des Affaires économiques, sociales et culturelles de l'Outre-Mer 23-mai-02 CORSEJean-Marie OLIVIER Cellule Europe SGAC Préfecture de région Corse 31-mai-02Rémy PRIVAT Chargé de mission étude / évaluation Préfecture de région Corse Catherine ISTRIA Secrétaire Générale du Conseil Exécutif Collectivité Territoriale de Corse 31-mai-02Catherine CERLIER Déléguée Régionale Délégation Régionale au Tourisme 30-mai-02François DENARIE Délégation Régionale au Tourisme 30-mai-02Jean-Charles ARDIN Directeur Régional Direction Régionale de l'Industrie, de la Recherche et de l'Environnement 31-mai-02Jean-François CURCI Chef du service Europe Direction Régionale de l'Agriculture et de la Forêt 30-mai-02Dominique TASSO Direction Régionale de l'Agriculture et de la Forêt 30-mai-02Gilles QUATREMERE Direction Régionale de l'Agriculture et de la Forêt 30-mai-02Evelyne HODEN Cellule Europe DRE Direction Régionale de l'Equipement 31-mai-02

GUADELOUPE

Suzy GAPPA Adjointe du chef de la cellule Europe SGAER Guadeloupe - Cellule Europe14 mai 02(téléphone)

Evelyne CASSIN Cellule Europe (évaluation) SGAER Guadeloupe - Cellule Europe14 mai 02(téléphone)

Patrick ZAMORE

GUYANE

Gérard SCEMAMAChargé de mission Europe, suivi etévaluation des interventions structurelles SGAR téléphone

Francis PEQUIN Bureau des affaires européennes SGAR MARTINIQUEGuy LONGAYGUE Unité de gestion des fonds européens Préfecture de la région Martinique Marie OSTALIE-MORVILLIER Correspondant évaluation - UGFE Préfecture de la région Martinique



NORD PAS DE CALAISGérard FLAMENT Directeur des Etudes et de l'Evaluation Préfecture de la région Nord Pas de Calais - SGAR 02-mai-02Christophe COUSIN Chargé de mission Etudes Préfecture de la région Nord Pas de Calais - SGAR Philippe DIEUDONNE Chargé de mission Affaires Européennes Préfecture de la région Nord Pas de Calais - SGAR 02-mai-02

Raphaël SCHOENTGENChef de la Division DéveloppementIndustriel et Technologique DRIRE

Jean-Marie LECLUSEAdjoint au chef de la DivisionDéveloppement Industriel et Technologique 05-juin-02

Caroline CALVEZ-MAES Fonds Européens Direction Régionale de l'Agriculture et de la Forêt 19-juin-02Denis HURET Direction Régionale de l'Equipement 19-juin-02Philippe FARVACQUE Direction Régionale de l'Equipement 20-juin-02Randolph SEGUY Directeur du Développement Chambre de Commerce et d'Industrie d'Avesnes sur Helpe 20-juin-02Olivier CORMIER Chargé d'affaires NFX (Nord France Expert) 21-juin-02Alain BEAURIEUX Chef comptable Entreprise OGURA 25-juin-02Françoise CLAIS Directrice des Ressources Humaines Entreprise OGURA 25-juin-02Jean-Marie VANZEMBERG Chargé de mission et responsable du Centre Centre d'Essais Ferroviaires 03-juil-02Gérard FERTIN Secrétariat Général, Juridique, Assurance MCA (Maubeuge Construction Automobile) 26-juin-02Paul FINZI Chambre de Commerce et d'Industrie de Valenciennes 20-juin-02Jacques MILLON Sous-Préfet Sous-préfecture de Valenciennes 25-juin-02

Christiane HENNIAUXChargée d'études (volet économique etentreprises)

Pôle d'Animation Economique de Valenciennes - Sous-préfecture deValenciennes 25-juin-02

Martine BLAVET Chargée de mission Pôle d'Animation Economique Territorial Sambre Avesnois juil-02 (tél)

REUNIONMme SORRES Préfecture de la région Réunion, SGAR 10-juil-02M. FUTHAZAR Conseil Régional Réunion 11-juil-02Serge JOSEPH Directeur AGILE (Agence de Gestion des Initiatives Locales en matière Européenne) 8-juil-02Laurent SENS Chargé de mission FSE AGILE (Agence de Gestion des Initiatives Locales en matière Européenne) 8-juil-02Alain ALTER Direction de l'Agriculture et de la Forêt 11-juil-02Jean-François LECHAUDEL Direction Régionale de l'Industrie, de la Recherche et de l'Environnement 8-juil-02Alix SERY Directeur Régional Direction du Travail, de l'Emploi et de la Formation Professionnelle 10-juil-02Denise HONG HOC CHEONG Direction du Travail, de l'Emploi et de la Formation Professionnelle 10-juil-02



Mme GRIMALDI Direction du Travail, de l'Emploi et de la Formation Professionnelle 10-juil-02Philippe LEGLISE Délégué Régional Délégation Régionale au Commerce, à l'Artisanat et au Tourisme 10-juil-02Alexis de POMMEROL Chef de service Direction Départementale de l'Equipement 9-juil-02Henri LUCAS Direction Régionale des Affaires Maritimes 8-juil-02M. PAPOT Direction Régionale des Affaires Maritimes 8-juil-02Jean-Marie TINCRESSE Chambre des Métiers 9-juil-02Alçay MOUROUVAYE Secrétaire Général Adjoint Chambre des Métiers 9-juil-02Jacques MAUNIER Directeur du Développement Economique Chambre des Métiers 9-juil-02Alain ABADIE Directeur Général des Services Conseil Général 11-juil-02M. CORE Conseil Général 11-juil-02M. LOCATE Conseil Général 11-juil-02M. TARDY Directeur Chambre d'Agriculture 11-juil-02

Marcel COMBACALResponsable de la Maison de l'EntrepriseNord Chambre de Commerce et d'Industrie de La Réunion

Ludovic SERRE Responsable Euro-Info-Centre Chambre de Commerce et d'Industrie de La Réunion



ANNEX 3 – EFFICIENCY CASE STUDIES

CASE STUDY – EFFICIENCY ANALYSISOGURA SAS

IdentificationName : OGURA S.A.S.Address : Parc d'activités de la Vallée de l'Escaut, BP 61, Onnaing 59264Tel/Fax : 03 27 20 03 20 / 03 27 47 44 44E-mail : [email protected] / function :

Mrs Françoise Clais, Human Resources Director, Tel : 03 27 28 56 07 / Fax : 03 27 2856 31

Mr Alain Beaurieux, Chief accountant, Tel : 03 27 28 56 20 / Fax : 03 27 28 56 01Date of interview : 25 June 2002

Miscellaneous informationDate of creation : 16/12/1996Legal status : SASNAF Code : 503AAddress of the registered office : 10, place Vendôme 75001 ParisCEO : Mr Akio IWASAKI

Employment and turnover

1997 1998 1999 2000 2001 2002(30.06)

Jobs forecasted in Obj. 1programme

- 39 111 164 182

Total long term jobscreated

5 50 54 76 88 90

Women en % 24%Turnover in M€ 4,5 25 31,5 36,4 36,5Turnover in Billion F 29,3 164 206 238 240

The turnover figures have been adjusted to the yen variations

Main client : Delphi Calsonic US

Missions or competences areaMain and only activity : production and commercialisation of air conditioner clutches for theautomobile industry.



History and evolution of activityThe Japanese group OGURA is the first producer of electro-magnetic clutches for car air-conditioners in the world.The parent company was created in 1938 in Japan. Today, it can count on 4 plants in Japanand 1 in the United States, with 1000 employees. On the demand of its main client Delphi,which had recently installed in the Douaisis area, Ogura met the Chamber of Commerce ofValenciennes and decided to establish in Onnaing in 1996. The firm thus found means ofactions in order to conquer the European market, establishing in the area of Valenciennes, inthe heart of the car industrial cluster.The Chamber of Commerce then built a 12.000 m² plant for OGURA that bought it in 1998.The production on the site only began in December 1998.

Name of project : "acquisition of equipment and tools"Axe 1. measure 1 : investment of enterprisesDate Programming Committee : June 1997

Project descriptionProgramming

Total cost EC funding(FEDER)

Other public funding(PAT, localauthorities)

Private funding(enterprise)

in M€ 17,9 1,04 2,5 14,4in MF 117,4 6,8 16,0 94,6in % 100 6% 14% 80%

Project description :The supported project (acquisition of equipment and tools) is part of the total investment forthe building of the plant. The funding enters in the framework of the Special Fund forImplantation (FSI) which enables to support the establishment of big firms25.

The project itself amounted to 18 M€ of total cost. It is part of a global investment programmeof 27 M€.

The recruitment was essentially made locally, but the main difficulty lay in the research ofAnglophone people (especially workers), indispensable in the firm. A training programmewas elaborated with all the local organisations : the recruited staff has to undertake a 3,5months training period in the enterprise.

The production staff represents 60% of the total staff.

Final beneficiary : OGURA.

25 FSI : This subsidy is additional to the Territorial Development Subsidy (PAT) and was created by the Regional Authorityin Nord Pas de Calais and the European Commission on ERDF funds.



Project assessmentInitialcost

Finalcost

Plannedduration

Finalduration

Planned outputs Final outputs

Production : 3,7 Mpieces in 2001

2,5 M pieces

18 M€ 11,3 M€ 3 years

Projectpartly

completedin July2002

Staff : 182 people in2001

88 people in 2002

Reasons for changes to planIn July 2002, only 2/3 of the forecasted investments have been completed. Only 2/3 of theobjectives in terms of turnover and half of the objectives in terms of recruitment havebeen accomplished.The delays compared to the objectives are due neither to problems in the management ofthe project, nor to programme managing issues. They are essentially due to lower ordersfrom OGURA's main client (donneur d'ordre), in spite of the arrival of new clients such asVolkswagen (through the intermediary of Delphi).The firm has decided t o adapt the investment to the volume of its orders and to postponethe end of the project till new commercial context.To date the enterprise has only received 50% of the forecasted ERDF funding. It hasasked the regional authority for a postponement of delays.

Calculation of overall unit costConsidering the investment in the actual state of realization of the project (i.e. 11.3 M€), thecost by job created can be estimated at 128 K€ of total investment.This is much higher than the initial estimates, as it was forecasted to reach 182 people in2001, for a total investment of 18 M€ (i.e. 98 K€ by job created).The average benchmark in this sector according to our estimations (and our previousEuropean programmes evaluations) is 85 000 € per job created in industry.



CASE STUDY – EFFICIENCY ANALYSISM.C.A. (Maubeuge Construction Automobile)

IdentificationName : Maubeuge Construction AutomobileAddress : Av. André Chausson 59600 MAUBEUGETel/Fax : 03 27 53 53 26 / 03 27 53 56 97E-mail :Contact / function :

Mr Gérard FERTIN, General and Judicial Secretariat, Insurances

Date of interview: 26 June 2002

Miscellaneous informationDate of creation : 1969 (1978 as MCA)Legal status : SNC (Company in Collective Name)NAF Code: 341Z


1994 1999 2001Total long term jobs 2479 3075 2996Women in % 8 7 7Turnover in M€ 0,61 1,310 1,356Turnover in MF 4 8,6 8,9

The turnover figures were adjusted to the legal and managementvariations of the firm so as to allow comparison.

Missions or competences areaMain and only activity : car production

History and evolution of activity

Maubeuge Construction Automobile is born of the Société des Usines Chausson (SUC),which created in 1969 a plant in Maubeuge with two production units : stamping and sheetmetal manufacture (tôlerie). In 1971, beside these two units, a new company (ChaussonCarrosserie) built 3 new units (painting, assembly, and finishing). Chausson Carrosserie wasthen composed of three partners : the SUC (52%), Renault (24%) and Peugeot (24%). In1972, the first vehicle came out of the production line.



In 1976, a legal reorganization integrated the stamping and panels units in ChaussonCarrosserie. The following year, Renault bought Peugeot's shares.

In 1978, Chausson Carrosserie was owned by Renault at 99,9%. In 1981, the companychanged name : Chausson Carrosserie became MCA.

In 1994, 67% of MCA's staff became shareholder of Renault SA. It was the beginning of theindustrial redeployment.

In 1993, the decision had been made to produce the "Kangoo" model on the site, what madenecessary a 457 M€ investment. The plant was thus deeply transformed.

The plant now counts on 5 main sectors (stamping, panels, painting, assembly and finishing),as well as on technical and tertiary services, which role is to support the production service.

Today, the site produces 1000 vehicles a day, it occupies 76 ha, and MCA is the firstindustrial enterprise in the area of Sambre-Avesnois in terms of employment (with 3100employees, including the interim workers).

Name of project : "installation of a painting line"Axe 1. measure 1 : investment of enterprisesDate Programming Committee : December 1997(and FSI (Special Fund for Implantation) : decision of 16 June 1998)

Project descriptionProgramming


Other public funding(PAT)

Private funding(enterprise)

in M€ 17,4 0,5 1,1 15,8in MF 114 3 7,4 103,6in % 100 3% 6% 91%

Project description :The project is included in an investment programme that began in 1994, and consisted in thealmost total renovation of MCA's industrial complex. For the project, the enterprise investedthen in a new painting line much more performing in terms of quality.

MCA's part of the financing was to be insured exclusively from debt with the parentcompany.

The modernization plan of the enterprise was accompanied by a strong effort in workerstraining, so as to adapt the staff to the requirements of new means of production andorganization. The enterprise forecasted to reach by the end of the programme a staff of at least2.500 people (long term jobs, i.e. net creation of 211 jobs) and the local induced jobs wereestimated at 300.

Final beneficiary : MCA



Project assessmentInitial cost Final cost Planned

durationFinal

durationPlanned outputs Final outputs

17,38 M€ 17,38 M€ 4 years 2 years Installation andmodernization of a

painting line

Installation andmodernization of a

painting lineCreation of 211 jobs Creation of 389

jobs

In June 1999, the plant's staff reached 2.678 people (long term jobs) i.e. 7% more thanforecasted, to which could be added 800 interim workers, as well as about 50 short term jobs.MCA completed its investments before the forecasted date : in front of the success of the newRenault's car ("Kangoo"), the firm indeed accelerated its investments.Having been realized the investments as forecasted, the ERDF funding was paid in 1999.

Calculation of overall unit costThe cost by job created can be estimated at 44,7 K€ of total investment.The average benchmark in this sector according to our estimations (and our previousEuropean programmes evaluations) is 85 000 € per job created in industry.

General comments of the enterprise :

The enterprise assumes that the ERDF participation was minor compared to the wholeinvestment that allowed to save 3.000 jobs. They think that there is no comparison with thesupport to establishment (FSI) : the funding should then concern at the same level projectslinked to the perpetuation of existing enterprises.Moreover, local taxation would put a real brake to the competitiveness of enterprises such asMCA. The business rates (taxe professionnelle) paid by MCA would be one of the group'shighest.Regarding the new programming period (2000-2006), the heaviness of administrative files forthe project holders would have dissuaded the enterprise to present a new project.



CASE STUDY – EFFICIENCY ANALYSISCentre d'Essais Ferroviaires

IdentificationName : CEF (Centre d'Essais Ferroviaires)Address : Rue Fresnel 59494 Petite ForêtTel/Fax : 03 27 32 46 53 / 03 27 32 46 50E-mail : [email protected] / function :

Mr Jean-Marie VANZEMBERG, chargé de mission (centre manager)Mrs SCHROOTEN, secretary and accountant

Date of interview : 3 July 2002

Miscellaneous informationDate of creation : 26/10/1998Legal status : SA (Anonymous Society)NB : - The CEF SA is the firm that built the trial loop. The loop is exploited by another SA(SOGEEF : Société de Gestion et d'Exploitation des Essais Ferroviaires) created in June 2000.- The exploitation began and the staff was contracted in August 2000.

NAF Code : 742 C for CEF / 352 Z for SOGEEF


2000/2001(Aug. 2000-March 2001)

2001/2002(until 31/03/02)

Total number of long term jobs* 7 7Women in % 29% 29%Turnover** in M€ 1,3 3,3Turnover** in MF 8,53 21,6Turnover SOGEEF*** in M€ 1,2 2,3

*The employees are contracted by SOGEEF**CEF's turnover is composed by private funding spread over 5 years***SOGEEF's turnover is composed by the Centre's activity wages

Missions or competences area

The CEF is a tool rented by railway equipment constructors, as well as by their partners(équipementiers), in order to undertake trials of conformity, certification, homologation ormore directly technical trials of endurance or safety for instance.



The activity concerns trains as well as subways or tramways.

History and evolution of activity

The history of the rail sector in region Nord Pas de Calais goes back to the 19th century withthe creation in 1882 of the Ateliers du Nord de la France (ANF) : this enterprise participatedin all the main realisations of the French rail industry, in France as well as abroad.

Since 1989, ANF-Industrie in the city of Crespin, is a subsidiary company of the Quebecgroup Bombardier Transport. Crespin is also the registered office of Bombardier TransportEurope Atlantique, that runs the activities of the British, Belgian, Swiss and French plants. Asthe second French railway equipment constructor, the plant employs more than 1000 people.

French first constructor of railway equipment is the group GEC Alsthom SA : this enterprisewas created in 1992 so as to handle the activity of Construction Matériel Ferroviaire Roulantby the GEC group. In Nord Pas de Calais, GEC Alsthom Transport employs more than 1000people.

Three reasons have been at the origin of the creation of the CEF :

- Before, the railway equipment was delivered to the client without being certified; theconformity trials were done by the client, what delayed the exploitation of newinfrastructures (subways, tramways) for several months.

- The constructors26' market in Europe knew few competition in Europe but wasdeveloping on the other continents. The fact of sending employees at the client's placethus represented high expenses.

- The moments when trials were allowed / possible on the public railway werebecoming more and more rare (2 hours during the night). The differentiation betweenthe exploiting structure (SNCF) and the railways owners (RFF) increased thedifficulty.

Siemens' decision to build its own centre in 1996-1997 pressed its competitors to do thesame27.

Three major actors have thus been at the origin of the Centre : two constructors (GEC-Alsthom Transport, and Bombardier), and public partners. The public partners wished theCentre to be opened to other users than the initial industrials, hence they are present in thecapital. The different initiators gather in the capital of CEF SA : 61,5% for Alstom Transport,5% for ANF Industrie (Bombardier), 33,5% for Certifer (French Agency for RailwayCertification).

The CEF then allows trials on transport equipment before the delivering to the users whowant a "ready to use" equipment. It is able to welcome certification trials par Certifer (locatedin Valenciennes). Being different the electrical voltage according to the countries, the Centrerequired very complex transformation installations.

The Centre brings to industrials and scientists an experimenting tool comparable to thecentres built in Germany, the United States, Poland and the Czech Republic.

On the first 24 months of exploitation, the occupation rate of the Centre reached 55%.

26 3 Europeans : Siemens, Bombardier, Alsthom27 NB : Siemens' centre allows trials until 160 km/h when Valenciennes' centre only reaches 120 km/h.



Employees recruitmentThe staff, essentially composed of technicians, had initially been sent on secondment byAlsthom. They can undertake the trials by themselves, but most of the time, the constructor'sstaff takes care of it.

NB : the Centre created 5 induced jobs, for the security of the site, especially regarding theprotection of industrial's secret.

Name of Project : "Centre d'Essais Ferroviaires de la région Nord Pas de Calais (FSI)"Axe 1. measure 1 : investment of enterprisesDate Programming Committee : June 1998

Project description :Programming :


Other public funding(Region FSI, PREDIT)

Privatefunding

in M€ 18,4 2,1 3,1 13,2in MF 121 13,8 20,2 87,1in % 100 11% 17% 72%

Project description :Three circuits have been built :

- one speed trials circuit ("U"-shaped loop),

- one endurance trials circuit (2 km-loop),- one circuit for automatic piloting trials (2 km-loop).

The whole device is complemented by an electric station serving the installation, as well as aworkshop building capable of welcoming a 120 metres-long train, and technical andadministrative services of the Centre.

The Centre is located not far away from the Alstom plant, near the forest of Raismes-StAmand. A small part of this forestry site had to be sacrificed, but a surface double the clearedland was reforested.

Final beneficiary : the CEF which built the rail loop



Project assessmentInitial cost Final cost Planned

durationFinal

durationPlanned outputs Final outputs

18,4 M€ 19,4 M€ 2,5 years(nov. 98-june

01)

2,5 years Construction of atrial loop

Construction ofthe trial loop

7 jobs created 7 jobs created

The total investment eventually amounted to 19,4 M€ : the additional spending has beensupported by the constructors.The realisation schedule was respected : works ended on June, 25, 2001.

Today, the enterprise has received 100% of the ERDF funds.

The interest of such a project is undeniable : the CEF complements the rail transport pole ofcompetences in the Nord Pas de Calais region, around Certifer agency and the C3T(Technological Centre on land transport) in Valenciennes.

There is also a project of creation of the European Agency for Rail Safety, which could belocated in Valenciennes or Lille (the regional capital).

It can be mentioned that additionally to this investment project, the CEF realised aninvestment in peripheral equipments of research and

We can mention also that in parallel with this investment, CEF has completed an otherinvestment in research equipment, also supported by the objective 1 programme (axe 2 –Recherche, développement et technologie, mesure 1 - émergence de la recherche,développement dans les entreprises). This project amounting to 4,4 M€ has received a grantfrom ERDF of 2,2 M€.

Calculation of overall unit cost

The cost by job created amounts to 2,6 M€. But behind the creation of the Centre lay a majorstake : the preservation of the 5000 jobs of the railway industrial cluster in the area, amongwhich 1000 jobs directly linked to the exportation markets (urban and suburban transport).

General comments of the enterprise :

The enterprise did not know any specific problem regarding the financial arrangement of thefile, and is satisfied with the local accompaniment. And yet, they regret the administrativeheaviness of files, whatever the amount is. On the 2000-2006 programme, the CEF ispresenting a project in cooperation with the University (Lille & Valenciennes) : this project isfinancially less important than the first one, but as heavy in an administrative point of view.



CASE STUDY – EFFICIENCY ANALYSISBOULEVARD SUD de SAINT-DENIS

Name of project: Boulevard Sud Saint-DenisLocation of project: La Réunion, Commune de Saint-DenisFinal beneficiary (project owner): Région RéunionProgramme : Objective 1 La Réunion, FranceStructural fund : ERDF Objective 1

Project descriptionRéunion is an island and its rugged relief means that there is only one viable way from onetown to another, namely along the coast. As a backbone to the road system, the RegionalDevelopment Plan calls for a dual carriageway (2x2 ways) from Saint-Benoît to Saint-Pierre.The section running through Saint-Denis is designed as an 8 km long urban boulevardoffering good connections to the city and reorganising access to its southern districts. Itrelieves the former RD44 feeder road of through traffic so that a reserved land publictransport system can be created, serving the city centre. Previous programmes had includedthe construction of access roads to the west and east.

Description given in the SPD (sub-measure 2.2) adopted in July 1994The SPD included the construction of a continuous road connecting the two sections alreadybuilt. The works included:

- an urban section forming an extension of the western part (U2) as far as the Route Digue,with a 7 m wide roadway suitable for later widening,

- a section between the Route Digue and Rue Lacroix, providing a connection to the east.

Projects Characteristics Total cost(excluding land)

2.2.1 Urban section Roadway 7m wide, 2 km long 157 MF 23,93 ME

2.2.2.Connecting section (East) Roadway 7m wide, 3 km long 116 MF 17,68 ME

Total 5 km of two-lane roadway on a laterdual carriageway platform

273 MF 41,61 ME

Adoption of a first section of project during the Local Monitoring Committee in October1995

Project Characteristics Eligible cost

2.2.2. Section from RouteDigue up to RN102 (Rivièredes Pluies)

Two-lane roadway, 3 km long,suitable for later development as 2x2ways

117 MF 17,84 ME



This 3 km long section featured 6 roundabouts to connect up with existing urban roads. Thetotal cost of the section was estimated in 1995 at 170 M francs, including VAT. Given theexpenditure already taken into account in the 1989-1993 PDOI, 117 M francs remained forthe 1995-1999 programme, with an ERDF participation of 64.4 M francs.

Modification of the project in 1997In 1997, the Local Monitoring Committee validated the re-programming of the project toenable funding for stage 1 ( 2.2.2) to be completed and to fund part of stage 2 (2.2.1).

Projects Characteristics Eligible cost retained by theMonitoring Committee

Section 1 –Section Route Digue -Ravine du Chaudron

Partly 2x2 ways 156,6 MF 23,87 ME

Section 2 – «Le Cerf » sectionbetween Ravine du Chaudron andRivière des Pluies RN102

Final 2x2 ways 50 MF 7,62 ME

Section 2 - Part of the « cityheart », composed of three sections

Final 2x2 ways 202 MF 30,79 ME

Total measure 2.2 408,6 MF 62,28 ME

We can notice that the first section decided in October 1995 has been truncated of itsChaudron - Rivière des Pluies part (linked to section 2), and that the urban section (called« City heart ») has only been partly programmed (3 on 5 sections). There were then twomodifications between the initial SPD and the revised SPD of 1997 : a net overspending ofthe first section’s cost and a reduction of the objectives as for the complete achievement of theBoulevard Sud in the framework of the second section.

Modification of the project in 1998The SPD was subject to a last modification in July 1998, with a re-definition of the « cityheart » part of section 2, composed of four sections for a cost of 173 MF, i.e. an overallamount of 224 MF of eligible works for the total section 2 within the 1994-1999 programme.

Achievements at the programme closureThe ERDF final report transmitted at the end of September 2002 mentions « a realisationdivided in two sections :- section 1 : « Cerf » section, between RD 60 and Route Digue, section U2/Tourette- section 2 : Tourette/Source section, going from Route Digue to the Doret Boulevard.All these sections have been delivered to circulation from year 2001. »



The closure table of engagements to 31 12 1999, mentions the following operations formeasure 2.2 :

Engaged projects Engagement

Total measure 2.2 518 272 728

2.2. 11 Section route Digue - Ravine du Chaudron 144 545 455

2.2. 12 Cerf Section and "city heart" sections 222 727 273

2.2. 21 Works of protection of the coastal road 57 500 000

2.2. 31 Intermediate links 10 000 000

Intermediate links 83 500 000

Over this amount of 518 272 728 F, only 75%, i.e. 387 872 016 F (according to the finalreport) were paid, thus traducing a delay in the outputs of the Boulevard Sud. The detail ofpayments by slice or by section has not been given in the final report.

Examination on the groundDuring the evaluator's visit in July 2002, we were indeed able to verify that sections betweenthe district of la Source and Vauban boulevard had not began yet. Thus the Boulevard Sudhad not been completed yet at the programme closure.

Justifications given for successive modifications to the programmeThe project for a southern by-pass around Saint-Denis goes back 25 years. It forms part of thecity's land use plan (Plan d’Occupation des Sols) and land was purchased for this purposevery early on. The first complete two lane connection was planned in 1994. However, theextremely rapid increase in automobile traffic forced the local and state authorities toreconsider the project in 1997 and to adopt immediately the final cross-section for thestretches of road then under construction.As the project had been planned in functional stages and scheduled to be implemented in twophases (and as it had been registered in the framework of the SPD in 1994), no "majorproject" file was submitted, as required by the commission regulations. Thus there is currentlyno document that summarises the socio-economic feasibility of all the works carried out todate.

At the request of the local authorities (Region, Department and City), the project's designersaimed for a structure that would not constitute a barrier within the city, as has often been thecase with by-passes in mainland France. Here, the road would be an urban boulevard formingan integral part of the Saint-Denis urban traffic plan, making allowance for public transport,cyclists and pedestrians.

Quantitative analysis of efficiencyThis analysis will only concern the functional section Route Digue - RN 102 - Rivière desPluies, for which we were able to find elements of comparison (approx. 3,4 km long section).



Initial costof project

Final cost Plannedduration

Finalduration

Planned outputs Finaloutputs

Unit cost perKm of dualurbancarriageway

117 MF 144+50 =194 MF at

the closure ofengagements

1994-1999

1994-2001 Creation of adual way, 7meters wide on3,4 km

A 2x2 way,14 meterswide on 3,4km

57 MF/km

It is difficult to make comparisons with average infrastructure costs. Here we must take intoaccount a bridge over the Ravine du Chaudron and several roundabouts due to the choice tomake of this by-pass a real urban boulevard communicating all the southern neighbourhoodsof the city.

This project could be situated in the upper standards in terms of cost for major urbaninfrastructure (between 40 and 60 MF per km).

Evaluator's assessmentThe various modifications of the project, the changing in the names of works sections, makecomparisons very uneasy between the initial project registered in the SPD of 1994, and theproject completed today. Regarding only the studied functional section, the cost would havebeen overspent by 65%. This can be explained by the major modification of the phasing , withthe decision to realise immediately the definitive 2x2 road. Since 1994, it appears that theproject has been revised to fit better into the urban development strategy. The City'sparticipation consequently increased 50% between the 1995 and 1998 financing plans.

These case study illustrates the difficulty to overcome the evolution of a project along time.The initial project has been designed twenty years ago. At the moment of the preparation ofthe SPD in 1994, the project was partly under construction and the following phases wereincluded in the document SPD 1994 on the basis of the initial financial quantification. But theworks scheduled were not a functional section. At this time, the project was studied at itspreliminary stage (avant-projet). When detailed design was completed, new requirementswere asked for urban integration and a new road profile was adopted, which led to differentplanning and higher costs. It results of all these changes successive presentations not coherentbetween themselves with changes in the denomination of work sections. We think that it istoday necessary to have a global presentation by the Region and its project managers of thewhole project and its evolution before any decision for the pursuing of the project with creditsfrom SF 2000-2006. The new SPD has scheduled the end of the Boulevard Sud but give nodetails on the cost by comparison with what has been done. Clarification is now necessary.

However we attest that the project realised is of very high quality and provides continuitywith the surrounding urban districts. From the economic standpoint, the project provides avital link between the business area around the airport in the east of the island and thosearound the ports on the western side. From the point of view of sustainable development, theproject has helped to develop the reserved land public transport system towards the citycentre, by unloading the other road of penetration inside the down town. This last mean oftransport has been used intensively by the city population since it was put into service.



ANNEX 4 – EXTRACTS FROM THE REGIONAL CASE STUDIES

Three regional case studies have been undertaken in July 2002 on the basis of the interviewson the three regions (Nord Pas de Calais, Corsica and La Réunion). Below are extracts fromthese regional studies which have not been quoted in the national report or which were thesubject of a synthesis.



Regional case studyObjective 1 - CORSICA

(…)

2. Appropriateness of strategies adopted and pursued 1994-1999(…)

2.3. Appropriateness of strategy adopted in 1994• Comments upon interviews and documents analysedFor the representatives of the State and of the Territorial Authority, the drawing up of theprogramme was made easier by the previous reflections on the development plan of Corsicawhich lasted two years (1992 and 1993). Globally, the strategy for using the structural fundshas not changed in five years, since it was based on a long term thought (15 to 20 years).

For each of the priorities we have stressed the following points :

- Infrastructures :

The "territorial continuity" now being provided by port facilities investments achieved duringprevious programmes and by government subsidies (80% of the costs of transport betweenisland and the mainland), priority was given to the roads to create a real regional market andmake tourism growth easier.

- Enhancement of agricultural products

The projects of mobilization of water resource (dams and water transfer) had first beenplanned for the development of irrigated areas (arboriculture and fodder crops yieldperpetuation).

In six years the strategy has evolved. The optimisation of resource control inducesinterconnections between pouring basins rather than new dams. On the other hand, largeirrigated areas are no longer being created. Then the mobilized water is used for the marketgardening, tourist centres and industrial needs.

As regards farmers support, the 1994 device is now considered by representatives as overorientated on direct support to farmer (which can reach until 80 %) without real economicalanalysis of the projects. Some farmers have thus been led at deadlocks.

- Enhancement of tourist and cultural heritage

For the current representatives, the "tourism" programme has lacked ambition. Even thoughtourism already was the first economic activity in Corsica, there was a lack in supportingmeasures, especially in terms of infrastructures : insufficient roads facilities, insecurity ofwater supplying, delay in the processing of liquid waste and household refuse. Theprogramme was mostly orientated towards qualification of the existing infrastructures.



- Economic growth

The industrial sector in Corsica is still in an embryonic state (7% of employment versus 20%in France in 1998). The supporting measures with a subsidy rate of 30% for the investmentswas totally suitable for new projects to emerge.

• Opinion of the consultantIn our opinion, although the structuring function of infrastructures have been put forward tofacilitate tourism and industrial productive functions, in 1994, the credit saved to basicinfrastructures didn't seem to match economical ambition (for instance only 20 km of roads insix years). Today this results still leave a great dissatisfaction in terms of traffic facilities andwater supply security.

The development plan for Corsica, prepared before the SPD has certainly led to a certainhierarchical organization of priorities. However, this plan had not yet come with anadjustment scheme which would have permitted to localize the priorities. The result of this isa certain dispersal of efforts .

Finally, the diagnosis noticed the weakness of entrepreneurial spirit in the productive sector.This weakness also exists on the professional organisations level. Considering localauthorities (municipalities and departments), there was also a lack of project and developmentmanagers. More than in other regions, a support and training programme for project holderswould have been necessary.

Apart from those reserves, the programme was coherent with the exposed priorities andresulted from a good level of consensus between partners especially between the State and theterritorial authority of Corsica.

The main modification is probably the one related to irrigation perimeters, for which the aimshave been limited to adapt to the evolution of agricultural production, taking into accountmore closely Corsica's specific assets and market needs.

3. Effectiveness3.1. Global approach to effectivenessComments upon interviews and documents analysedThe level of effectiveness of the programme (i.e. outputs or results compared to initial goals)varies according to the priorities.

Very strong Strong Adequate WeakTransports (infrastructures) xEnergy (infrastructures) xTIC xEnvironment xR & D xSME xHuman resources development xFishing



Very strong Strong Adequate WeakRural development x

Weak pointsThree factors have reduced the efficiency of the programme :

- complexity of public markets and public inquiries processes for the major building sites(chantiers),

- weakness of the financial strength of the project holder local authorities (communes,departments) which have not been able to make an advance funding or to raise localcounterparts,

- weakness of private projects holders and of their professional organizations, as well assmall size of the enterprises in charge of the realisations.

Those three factors have had cumulative negative effects : the low number of operationswhich were ready on the studies or procedures stage has not allowed to substitute newprojects to those which were stuck by the first factor.

Strong pointsThe success factors first come from the good level of partnership between the State and thelocal authority contrary to other regions where regional authorities have not been associatedwith responsibilities. The personal involvement of the President of the regional executiveplayed a role in raising new projects.

Opinion of the consultantThe project culture with the control of the different stages of the project cycle (identification,generation of new projects, feasibility studies, statutory administrative files (inquiries,declaration of public utility, public markets…), project managing, project ownership,realization and follow-up), were not very developed in Corsica in local and regionalauthorities. Skills transfer has probably not been immediately accompanied with a capacity ofexpertise from the new project owners. This project culture and expertise capacity can only begained with the experience of important operations which have never been carried out to sucha scale in Corsica.

3.2. Analysis of effectiveness and effects of the programme per priority(…)

Thematic comments• TransportsPriority was given to the two road links RN 193 : link Ajaccio – Corte – Bastia, and RN 200 :link Corte - Aléria.

The whole programme is under achievement. The most important realizations are the bridgeof Vecchio and the 14 km of total renovation of the road between Corte and Omessa.



The output indicator (20 km) has been achieved by the accumulation of various sections andstructures (bridge, tunnel). The result indicator (9 minutes gained on the distance Ajaccio-Bastia instead of the 30 minutes initially announced, which rather concerned the totalprogramme achieved in 2015 at the earliest) will only be possible to check after the ends ofworks. Beyond time gained, the result can similarly be evaluated in terms of comfort andsecurity. On the long-term, there will be an impact in tourism frequenting and in theunification of internal market of goods and services.

Comments upon interviews and documents analysedThe programme has suffered from considerable delays. They can be explained by the delaysin terms of files preparation, technical studies, land acquisition (see what has already beensaid on § 3.1. Global approach of effectiveness) and also by the lack of means of Corsicancompanies which have to make the works. The decision and management of works nowbelong to the Territorial Authority (CTC) which is endowed with specific means.

Opinion of the consultantAt this pace, the special road investment plan could be achieved in fifteen or twenty years andthere will still remain secondary network in need of repair. If it seems possible (as part as thespecial investment plan) to raise faster investments, better means of evaluation andengineering at the territorial authority's level will have to be found to make projects readyupstream. Moreover, the railway has been abandoned for a long time and fortunately, the2000-2006 SPD has reserved some funds for it. It is an alternative, under-used means oftransport, still having a higher performance considering sustainable development.

• Mobilization of water resourceComments upon interviews and documents analysedThe strategy was better defined thanks to the delays in beginning the works. Projects of damshave been interrupted for the benefit of water transfer operations and interconnections takingmore advantages of the resource. Aims are no longer only agricultural ones : they alsobecome urban, industrial and tourist ones. As a result, hydraulic works have been funded byERDF rather than EAGGF.

The strong point of this priority definitely is the unicity of the operator, the OEHC (Office ofHydraulic Equipments in Corsica) which directly depends on the territorial authorities.However, this strength can have a reverse side : the funding authority is also manager andthere are no debates on solutions or priorities between territories.

On the other hand, at present the price of water would only represent a third of the productioncost.

Opinion of the consultantIn the island, the water resource is plentiful. However, in the long term, conflicts could appearbetween its different uses : agriculture / tourism for instance. Only the knowledge of real costscan lead to the economic optimisation. The optimisation will need the confrontation of severaltechnical solutions and a better users' awareness.



• EnvironmentThe coastline purification continued, with 16 networks and 16 purification plants for a totalcapacity of 120 000 population equivalent.

An inter-departmental plan for waste treatment was developed but no large action wasimplemented. Some areas of voluntary sorting exist in Ajaccio as well as two dumps inBastia.

Natural heritage protection leads to the acquisition of new lands to protect, as well as to thedevelopment of conservation areas (in particular in the regional national park) and beaches.The frame (bâti) enhancement has interested the two towns of Bastia and Ajaccio and twentyvillages in the interior of the island.

Comments upon interviews and documents analysedThe consultative process for the waste treatment plan has taken a long time but this plan isnow adopted.

Opinion of the consultantIn order to reach the aim of developing a tourism of quality in Corsica, a great vigilance isneeded in terms of environmental respect on the coast as well as in the mountains. The delaycan be explained by two factors : a lack of awareness from the population and the people incharge of environmental issues, the difficulty to lead special procedures for Corsica (landacquisition, public consultations, co-ordination between services…). Nevertheless, we canunderline the adoption of the waste treatment plan when some tourist departments of themainland still have difficulties in finding a consensus on such a matter.

• R & D, UniversitiesStarted in 1990, the programme of university new buildings, has planned for the 1994-1999period the doubling of the surfaces realized during the first period. Only one part of thisobjective has been achieved through a freeze in an administrative process (non published callfor tenders at the European level).

Programmes for technological diffusion have been started as well as works related to newenergies (solar, photovoltaic, woods, wind energy…)

• SMEs and support to economic activity (industry)The number of files submitted by the enterprises has been constant during the whole period.This has led to the emergence of a certain number of interesting opportunities : asubcontracting society in aeronautics (135 jobs today), an industrial boiler-maker specializedin buried tanks, a yacht composite bottoms manufacturer, a numerical cartoon producer (20jobs).



Comments upon interviews and documents analysedThe success of this measure demonstrates that technical skills can be found on the island, andthat the policy of territorial continuity (80% of the maritime transport cost is paid by theState) puts those companies on equal terms with those of the mainland.

The concern doesn't come from transport costs but from the reliability of transports delays.Indeed, numerous strikes can block the goods and force the companies to create stocks onboth sides of the “crossing”.

Opinion of the consultantIndustrial work is relatively weak in Corsica (6600 jobs in the industry and energy sector, notconsidering construction, that is to say 8% vs. 18% on the national level of total employment)but it has been staying at this level for more than twenty years, whereas it has globallylessened in France.

Only about ten enterprises have more than 50 workers. In this sector, creation is roughly 60enterprises per year.

The actions in order to sustain material / tangible (30% of investment support) or immaterialinvestment seem to have awaken entrepreneurial spirit and the two towns of Bastia andAjaccio have arranged industrial estates and built "incubators" (pépinières) or enterprisebuildings so as to welcome the creations. University growth and actions in favour of higherqualifications have been favourable elements. A core of ICT companies and an ENSAMagency are settling in Bastia, showing the island’s will to have its share in the innovationfield.

• SMEs and support to economic activity (tourism)The PDC has chosen a strategy of quality tourism based on the wealth and the specificity ofnatural and cultural heritage of the island. The tourist activity has to include in a sustainabledevelopment of Corsica. The aim was to increase the number of overnight stays with a morebalanced way in season terms (extension of the season) and in spatial terms (distribution ofreception over the territory).

The hotel park mainly consists of family units hostelry, independent and small seized (30 to50 rooms 2 and 3-star). These are those which have been supported and for most of them atthe end of the period (1998-1999) because of the serious crisis of Corsican tourism between1993 and 1996.

Moreover the programme has initiated resorts contracts, country contracts or sites contracts.On the basis of a diagnosis made with the operators, it consists in defining a strategy toimprove the global tourist product related to one spot.

Comments upon interviews and documents analysedThe people in charge of following this policy consider that the restricted budget couldn't bebetter managed; however it was not enough compared to the island potentialities and the placeof tourism in the Corsican economy.



The contracts for the mountain places have not been sufficiently developed because of thelack of credits. On the other hand, the management of ERDF funds is not adapted tointangible investments in the numerous little actions needed for a “site contract”.

Opinion of the consultantIn the SPD, tourism is known to be one of the first incomes and employment supplies for thelocal economy. However, the regional Development Plan has turn down a “tourism only”strategy or big developments. The strategy which was chosen (development of natural spots,promoting the inner villages, tourist products based on the reception in small units, on therespect and the enhancement of cultural heritage…) needs very important means in order tomake the professionals receptive, to animate local networks around global offer, to supportprojects holders in local authorities. The methods for attributing ERDF and Contrat de Plan'ssubsidies do not seem to be adapted to numerous initiatives.

Besides, tourism deeply depends on other policies (transport infrastructures, security of watersupply, quality of the soil product, environmental respect, liquid waste and household refuseprocessing, training…). Thus, it is necessary for the tourist component of regionalprogrammes to be examined in horizontal studies with the other components to make sure ofthe coherence of the policies.

• Rural developmentComments upon interviews and documents analysedIn quantitative terms, the initial aims of realizations have been achieved. However, it has beenestablished that many projects have been started without being convinced of their economicalfeasibility. Despite of a very important rate of support, many farmers were heavily in debt andhad to abandon their projects. Moreover many investments (e.g. purchase of sprayer forirrigation) were made by farmers without technical support and formation. The low cost ofwater (0,30 FF per m3) doesn't prompt anybody to avoid to waste it.

Opinion of the consultantIt seems as if the farmers have been supported in all their actions without a will to make themresponsible in the framework of a larger autonomy to face the market evolutions. The lessonlearnt from the failures of the first years (except for the wine path), enabled to rectify thetrend at the end of the programming period with an orientation towards promoting moretraditional Corsican products and more adapted on the pedo-climatic plan : sweet chestnut,olive, hazelnut, almond.

3.3. Key factors contributing to the effectiveness of the programme

Success factors ArgumentGood partnership betweenthe State and the CorsicanTerritorial Autorithy on acommon strategy basis

- In 1993 the General Assembly of Corsica adopted the PDC after avery broad co-ordination with all its partners . The State wasassociated with the objectives of this plan to get them back to theCPER and the SPD 1994-1999 which became the operationalinstruments of a first defined strategy.



- Since 1994, the follow-up committee and the planning committeewere co-directed by the prefect and the president of the territorialauthorities of Corsica.

Presence of big operatorsto initiate projects

The territorial authorities of Corsica, having wider powers than a regionfrom the mainland, had endowed development agencies with theresponsibility of supervising whole parts of the programme : ADEC forthe enterprises development, OEHC for hydraulic equipment, ATC fortourism and a “roads” office proper to the territorial authority. Thisagencies have initiated proposals and animation to spend the communitycredits.

Obstacles ArgumentLack of practice in themanagement of importantprojects

At the beginning of the project, decentralized operators had not acquiredthe practice in managing important projects and there were freezes (public utility survey, appeal to administrative court, publications for thecall for tenders….).The preliminary studies, the planning of the markets, public utilitysurveys, were not enough advanced to propose alternative projects, readyto be used in case of hazards in certain files..

Weakness of certainfunding authorities’financial strength

Small communes, departments, have not enough financial funds to makean advance funding for national or European subsidies. A procedure of“relay loan” (prêt relais) has been set up with banks at the end of theprogramme which made credits easier to be spent.

Weak capacity of privateprojects holders

Professionals are still too weakly organized on the island. For instance,some fishermen who have a project of fish market had difficulties to setup this project.

(…)



Regional case studyObjective 1 - LA REUNION

(…)2. Appropriateness of strategies adopted and pursued 1994-1999(…)

2.3. Appropriateness of strategy adopted in 1994General comments on the basis of interviews and documents analysedIn 1992-93, Réunion drew up an economic development plan that served as a basis for theSPD and Contrat de Plan Etat-Région proposed in 1994. Similarly, a Regional DevelopmentScheme was prepared in 1990 and approved in 1995. On the basis of these documents it waspossible to define the following priorities:

- educating and raising the level of qualifications,- diversifying the production system,- providing the economic area with aids to development (opening up the region,

infrastructure, upgrading of facilities),- opening Réunion up to the Indian Ocean and Europe.

This strategy was intended to cope with population growth by opening up new employmentopportunities. It was not modified during the six years of the programme as it had beenprepared for the long term.

Officials insisted on the following points for each of the priorities:

• Education and raising of qualification levelsFaced with the demographic stakes involved (an annual increase in the active population of7000 people per year) and decline in agricultural jobs, efforts to improve education andqualification levels were a priority, with a view to diversifying the activities and mobility oflocal inhabitants.

• Diversification of the production systemThe production sector represented 45% of the SPD credit, with the aim of going beyondsimply substituting imports for local products. Modernisation of the sugar cane sector, whichrepresented 80% of exports, would be continued. The SPD also provided for the developmentof food processing and assistance in encouraging, investing in and accompanying thedevelopment of companies. Tourism was also to be a sector of diversification, helping tobalance trade.

• Opening up the island and support infrastructureThe airport runway had been lengthened during the previous period, so that direct flights fromFrance could land on Réunion. The 1994-1999 programme therefore planned to extend theairport building in order to take full advantage of this longer runway.

The programme also included a large share for "catching up" in terms of public infrastructure(secondary schools, reserved-lane public transport and roads).



• Opening up to the Indian Ocean and EuropeThis was to be based on the new harbour and airport infrastructure facilities. This strategicpriority was to include establishing relations aimed at economic cooperation withneighbouring countries while at the same time participating in the community market.

Evaluator's assessmentThe foregoing description underlines the structural difficulties facing Réunion (populationgrowth, small local market, distance of market from the European continent). The effortsmade to "catch up" in terms of basic facilities (harbour, airport, roads, public facilities) and interms of raising qualifications are a partial response to this situation.

However, the objective of opening up Réunion economically to Europe and the Indian Oceanwas not accompanied by an in-depth analysis of the potential opportunities. What are theadvantages in comparison with neighbouring states (Mauritius, Madagascar, South Africa ?).What role can Réunion play in exchanges between Europe and these countries?

The proposed measures (support to tangible and intangible investments, creation of businessparks, incubators, assistance to small-scale businesses, financial engineering, etc.) areindistinguishable from those proposed in other areas of mainland France, but seemed tocorrespond to the identified stakes. It appeared that proportionally, ESF and EAGGF supporthad a more important financial weight in La Réunion than in other regions.

3. Effectiveness3.1. General approach to effectiveness

Comments based on interviews and documents analysedThe degree of effectiveness of the programme, i.e. the ratio between achievements or resultsand initial objectives, varies depending on the priority in question.

Very strong Strong Adequate WeakTransport (infrastructure) xEnergy (infrastructure) xInformation and communicationtechnologies

x

Environment xR & D xSME xHuman resources development xFisheries xRural development x

Weak pointsOn the programme officials point of view, the factor that has most prevented good projectsfrom emerging was the permanent legal insecurity maintained by increasingly stringentcontrols. From 1997 onwards, uncertainty regarding the rules of the game meant that projects



sponsors took fewer initiatives. For example, attempts were made to develop experimentswith an alternative economy. But procedures became so complex that programme leadersasked whether someone with a promising project should resist to the constraints of structuralfunds.

Strong pointsThe partnership existing at national, regional and departmental levels helps to reach aconsensus on priorities. Since 1991 Réunion has adopted this method of operation, with threeco-chairs: the Prefect, Chairman of the Regional Authority (Président de Région) andChairman of the Department Council (Président du Conseil Général).

Evaluator's assessmentWhile the consensus that reigns between the three administrative levels in Réunion is apositive factor, the changes and imprecision of the regulations mean that discussions betweenthe partners today are dominated exclusively by procedures and successive controls, to thedetriment of time spent on thinking about strategy and on evaluation (the programme officialsassume though that they only finance good projects).


Thematic comments per sector

• Transports

With regard to the airport, the programme had essentially forecasted an enlargement of thepassenger terminal, which works completed in 2001 : the extension of the passenger terminalallowed to have an extensive use of the new runway that had been extended in the previousprogramme. The passenger traffic has increased by 20% over the period, but the airport isnow ready to accommodate twice the present flow. This is an important condition for thedevelopment of the economy.

As far as roads are concerned, three major operations were implemented :

- continued development of the southern boulevard, providing a fast E-W link andfeeding the various neighbourhoods of Saint-Denis (this project is not finished yet);

- work to render the RN1 coast road safer;

- Bras de la Plaine bridge, providing a link between Saint Pierre and l'Entre Deux.

Lastly, a reserved lane public transport infrastructure has been built in Saint-Denis, covering5.5 km.

Comments on the basis of interviews and documents analysedThe road works form part of a development strategy worked out in the Regional Master Plan(Schéma Directeur Régional) and Saint-Denis Urban Transport Plan. The achievements are inconformity with forecasts. The project coordination and supervision departments consider that



the design and works supervisor teams were overwhelmed by several projects requested fromthe public authorities.

The achievements are of good quality, thanks in part to the European Community's help.

Evaluator's assessmentThe distribution of population and activities mostly around the coast of the island means thatthe road development scheme is relatively simple, consisting of a coastal ring road. Unlikeother island regions, there is continuous and consistent effort, with an approved developmentscheme. Unfortunately, the number of cars per household is continuing to grow, and will bethe same as that in mainland France in a few years. This suggests that there will be alikelihood of further congestion, with risks for road safety and the environment. It wastherefore absolutely essential to introduce a policy of reserved-lane public transport, and thishas been done for St-Denis city. The result is of high quality and the lanes are respected,unlike those in numerous regional capitals in mainland France. Studies have begun to extendthis system in stages to other inter-city links.

• Other infrastructuresA strong effort was made towards the building of new educational establishments (secondarycolleges and high schools) so as to answer the demographic stakes. Contributions of ERDFhave been mobilized to participate in a special plan to build 4 secondary schools and 8 highschools totalising 9000 pupils. Eventually, a dozen of training centres have been built orrenovated.

Evaluator's assessmentThese investments have represented the second expenditure item of the programme after theproject of water transfer. The island was really behind with the sector's needs : in parallel tothe rise of the schooling rate, the increase in the number of high schools was indispensable inorder to improve the young people's opportunities to have access to the working world.

• Mobilisation of water resources

The transfer of water from the windward side to the leeward side of the island (E-W) iscertainly one of the most ambitious projects to be undertaken on Réunion for many years. Theproject has been partially completed, enabling the first irrigation areas to be served.Excavation of the downstream gallery between Mafate and Rivière des Pluies has currentlybeen interrupted for geological reasons. An exceptional postponement has been obtained untilDecember 2003 for the payments linked to this large project.

Comments on the basis of interviews and documents analysedThe mobilisation of water resources, which are especially abundant on the eastern side of theisland, includes essentially individual hill lakes (500 000 m3 supplying 307 beneficiaries), ashared reservoir (28 000 m3) and the transfer of water which both enables support toeconomic activities and development of irrigation, mainly on sugar cane plantations. The



Regional Directorate of Agriculture and Forestry (DRAF) estimates that yields after irrigationare tripled in the case of sugar cane and quintupled in the case of stock-rearing. The majortransfer and irrigation operations are accompanied by an organisation aimed at managing thenew mobilised resources: introduction of a Master Plan for Water Development andManagement (SDAGE), creation of a River Basin Authority and a local Water Commission ofthe west.

Evaluator's assessmentThe abundant resources redistributed over the entire island offer new opportunities foreconomic development and modernization of agriculture, developing farming paths and alsotourism and other activities on the west coast. However, care needs to be taken to avoidconflicts over the use of both water and land. The Chamber of Agriculture is concerned by thethreat to agricultural land posed by the expansion of housing. The 1995 Master Plan defined aprotected area of 35 000 ha but this needs to be adopted by each commune in its SCOT(Schéma de Cohérence Territorial – Local Coherence Scheme).

• EnvironmentIt is commonly agreed that measures concerning waste treatment and waste water seweragewere difficult to implement during this period, even though a household waste disposal planwas drawn up in 1994. Priority was given to the primary network (water distribution andconveyance) rather than purification.

The new Communautés de Communes (Urban Districts) set up from 1997 onwards areresponsible for setting up collection and treatment units. This partly explains the delay inimplementation.

Subsidies were used mainly to extend the water supply network in newly urbanised areas tothe detriment of waste water collection and treatment (according to an intermediate evaluationby Beture).

• Research and Development

Structural funds were used to set up two new agencies: the Scientific and TechnologicalCenter for Enterprises (ESTER) to make it easier for regional businesses to have access totechnology28, and a semi-public company to promote the development and use of newinformation and communication technologies. The results obtained by these two agencieswith regard to local businesses so far appear to be poor.

It must be underlined though, that the choice had been made to deal with this sector's projectswithin REGIS programme rather than in the Objective 1 SPD.

28 This includes three transfer centres for the food industry, quality and metrology, and technical assistance to informationand communication technologies.



• SMEs in the manufactured sectorComments on the basis of interviews and documents analysedOnly 180 companies in the industrial sector have more than 10 employees. And yet, 300industrial investment projects were funded and 250 craftsmen assisted in the context ofcollective actions. Companies therefore benefited extensively from investment aids,especially as these were combined with significant tax breaks. The volume of industrialinvestment was high (FRF 700 million a year) and hence in overall terms the secondary sectorcreated employment (800 jobs between 1995 and 1999, i.e. an increase of 10%).

Local production roughly followed the increase in population, but had difficulty in goingfurther and becoming integrated into international trade.

As those in charge of this measure observed that businesses had no difficulty in funding theirinvestments, they oriented aid towards intangible investments (consultancy, recruitment ofmanagers, etc.) or else they withheld all aid (both tangible and intangible) and aid forinvesting in information and communication technologies.

With regard to small crafts, the local Chamber of trade attempted to support local paths facingstrong competition from products imported from mainland France, by working on aspects ofquality and differentiation of the offer.

We have also to mention the support given for small business creation by unemployed peoplewho receive loans at low rate without guarantee, to develop their own jobs. 524 people havebeen helped by this way, one third of them being women.

Evaluator's assessmentThe creation of jobs in the secondary sector (+10% in four years) seems to have been limitedwhereas jobs in services to business or in commerce increased respectively by 45% and 18%.These last growths are partly explained by the increased number of jobs in care-taking andoffice cleaning, harbour services for imports, logistics and jobs in large stores. It should benoted that the ten largest companies in terms of turnover in 1999 were commercial businesses(including four automobile dealers). Out of the 20 largest companies, only the Sucrière de LaRéunion belongs to the secondary sector (according to 1999 official statistics from theINSEE).

It should also be recalled that the ratio of exports as a capacity to import is only 8%, hencethere is a severe imbalance in the regional economy. In addition, investment by localbusinessmen tends to accompany the major flows in relation to imports and the distribution ofimported commodities. Only crafts, building construction and food processing industries(32% coverage rate) are still resisting.

The decisions taken at the end of the programme to orient SPD aid towards intangibleinvestments rather than physical investments are to be pursued.

Each business and each industrial sector must first define a long-term strategy beforeinvestment in equipment.

• SMEs in tourismMeasured in terms of the added value of hotels and restaurants, tourism is equivalent to about50% of the added value of industry (INSEE statistics, 1996), which is far from negligible. Thecontribution of tourism to the local economy may be regarded as even greater if one considers



the total expenditure by tourists, which is evaluated at 320 million euros, i.e. more thanmanufacture exports (226 million euros).

The main realisations can be distributed between three actions :- the improvement of the quality of the accommodation offer and its development. A

total of 15 new hotels have been built and 15 others have been renewed. As aconsequence, the total number of classified beds has increased by 50% during thesesix years.

- The development of new leisure parks : exotic garden, aquatic leisure park, crocodilepark…

- The development of sport activities and equipment on the littoral coast and in themountainous part of the island.

Comments on the basis of interviews and documents analysedTourists come essentially from mainland France (80%). Most of these French tourists (42%)come to stay with their families or friends (tourism by affinity). Accommodation is found insmall units and there is little in the way of comprehensive packages (tour operators). Thetourist offering is more diverse than that of comparable destinations (Mauritius) as Réunionoffers both seaside and mountain activities (hiking, volcanic sites, etc.).

With regard to achievements, work with regard to the offering (creation and requalification ofhotel rooms and self-catering accommodation) appears to have been below initial forecasts(according to an internal evaluation by Beture). To go beyond family investments and therenovation of the first hotels built some 30 years ago, complete project engineering needs tobe introduced. The lack of intermediate agencies (hotel federations, local tourist promotionassociations, regional travel agencies, etc.), the lack of forums for exchanging best practices,and the lack of State department staff to accompany project sponsors in the field partlyexplain the small number of accommodation projects.

In contrast, there has been significant development of various sites via "contrats de station":these include footpaths, bridle paths, mountain-biking trails, rock-climbing routes in thehighlands and marina infrastructure on the coast.

Evaluator's assessmentThe increase in tourist numbers, which has been around 5% per annum over the past fouryears29 has not reached the objective of 500 000 initially set in the regional development plan(reaching only 430 000 in 2000). Yet measure 1.6 (increasing and improving the touristoffering) and measure 3.5 (tourist schemes and facilities) were well suited to the context ofRéunion. When projects are well prepared, there is a considerable leveraging effect on privateoperators, as can be seen from the intermediate evaluation by Beture.

The mixed strategy ("blue-green") with its accompanying infrastructure ("typical" smalltourist facilities, self-catering accommodation in the countryside and mountains, creation ofnatural parks, sporting and adventure activities, etc.) is what will enable Réunion todistinguish itself from other islands and attract a demanding clientele accustomed to Europeanquality standards. The achievements of the 1994-1999 are a step in this direction.

It can also be underlined that insularity has an impact on tourism development, as it dependsalmost exclusively on aerial transport and its hazards. 29 (lower than the 12% average rates over the 1994-1997 period)



• Rural development

Comments on the basis of interviews and documents analysedSetting up young farmers has been facilitated, after a period when the youth was leavingagriculture, and 421 allocations were given to young farmers during the programme. Thesesettlements have contributed to maintain viable rural communities even in the "highlands"(Les Hauts). Given the isolation of Réunion with regard to continental markets, the strategyhas been to process and sell as much local produce as possible on the island to meet theincreasing demand in terms of quantity (population growth) and quality (greater purchasingpower). The sector strategy has given good results. At the end of the chain, this has led to thecreation of 30 food processing units, representing about 300 jobs.

The porcine path ensures meat supplies to the region. The bovine sector covers 40% ofconsumption. Similarly, dairy production has doubled since 1994. These three sectors arevery well organised, relying on solid cooperatives.

Sugar cane of course occupies a special position. The objective is to hold production above2 million tonnes of cane in order to keep the island's two plants in operation. This objective isnot yet being reached as production has not exceeded 1.8 million tonnes since 1995.

Increasing production involves land redistribution, stone removal, opening tracks andcultivating new plots. The irrigation that is now possible thanks to the first stage of the watertransfer enables yields to be tripled. The investment made during this programme shouldtherefore give good results provided that agricultural land is protected against urbandevelopment, which is not always easy and would call for more accurate urban planningdocuments (request from the Chamber of Agriculture).

The other crop sectors are fragmented. The programme has enabled the cooperatives toacquire cold storage rooms. Three products have had a certain amount of success as exports,namely Victoria pineapples, lychees and José mangoes. However, they need to be airfreighted to Europe, and this is no longer guaranteed. These products are also very sensitive toweather conditions, especially cyclones.

As regards safeguarding the environment and preserving the countryside, clearance of forestsand reafforestation have been pursued as scheduled. This contributes to the attractiveness ofthe rural sector which is well developed.A coherent strategy has been settled for a sustainable development of the Highlands (LesHauts). It is related to maintaining the multi-activity (agriculture, forestry, tourism…), directvalorisation of the local products, struggle against soil erosion. For this last objective, specialanti-erosive techniques have been elaborated with 119 farmers.

Evaluator's assessmentSugar cane and other industrial plants represent 30% of agricultural produce and 50% of theisland's exports. The structural programmes in progress provide guarantees for this sector onthe island. The other types of produce (fruit and vegetables, meat, etc.) are progressingsignificantly, in order to keep pace with the increasing demand from the local population.Agriculture has thus maintained a steady number of jobs since 1994 and contributes to thewell balanced distribution of population within the Island. Agronomic research has beenparticularly developed, with research into new sugar cane varieties supported by theprogramme. Réunion could thus become a world reference for this type of crop. After a



period when people were leaving agriculture, young people are now returning (but in alimited way), with 421 allocations for young farmers during the period. Nonetheless, beinglimited the offer of agricultural surface in a mountainous area, the settlement of youngfarmers depends upon land availability. When European agriculture undertakes regrouping oflands, La Réunion on the contrary slices up the land.

The modernisation of farms, rejuvenation of farmers and development of reasonableagriculture are all guarantees that will help to maintain the island's fundamental andsustainable balances.

• Employment, vocational training and solidarityThe only final report available during the evaluator's visit in July 2002 was that concerningthe ESF aspects.

Comments on the basis of interviews and documents analysedThe level of achievement is very high (99,5% of the programme) and efforts in terms oftraining have given very satisfactory results. In all, 109 000 people benefited from this, half inlong-term training programmes (more than 500 hours on average). Of these, 58% were youngpeople under 25, 55% were registered as unemployed, 29% were women, and wage earnersaccounted for less than 10%. A survey conducted in 2000 showed that trainees who hadreceived vocational training found work more rapidly within six months of finishing thecourse (42% were at work as against 20% in the initial situation).

Because of its importance in funding vocational training (42% of the total funding), the ESFhas had a decisive effect on the way training is provided : professionalization of thoseinvolved, reorganisation of branches, training of trainers.

A total of 20 000 people also received a mobility funding. This enabled skilled or unskilledyoung people to continue their training (mainly) in mainland France and sometimes to find afirst job there.

71 enterprises benefited from vocational training development agreements (Engagements deDéveloppement de la Formation) and joint inter-business training (especially in the craftssector).

Socio-economic integration measures were also implemented : 2200 environment linked jobs,and partnership agreements in the context of the local reintegration plan (PLIE) at Le Port forthose with the worst problems.

As for them, the Boutique de Gestion, the Cellule d'Insertion par l'Economique, and thestructures Réunion Entreprendre and ADIE appear to have helped create a total of 2700businesses in 6 years, representing a significant share of the 3800 businesses created on theisland.

Evaluator's assessmentThe challenges in terms of employment and the qualification of young people coming on tothe employment market are so important for Réunion that it is not surprising that there hasbeen such mobilisation centred on the measures funded by the ESF. The general rise in levelof qualifications has been significant. Unfortunately, job offers in the trading sector have notkept pace with the increase in the active population.



Two initiatives have been taken to compensate for the weakness of the job market : help tomobility, enabling young people to apply for jobs in other parts of France or in othercountries; and support to solidarity economy, opening up new fields of activity to cater forlocal social demands (personal services, environmental jobs, etc.). The 1994-1999 programmemade several overhangs which should be strengthened in the following programme.


Key factors ArgumentVery good tripartitepartnership between State,Region and Department

Since 1991, European programmes have been prepared and implementedon a tripartite basis. Far from resulting in deadlock, this jointresponsibility within the same geographical area appears to haveproduced a certain dynamism: seeking consensus, making transparencybetween the partners obligatory, sharing knowledge of local factors. Thispartnership has resulted in the creation of a single resource formonitoring the programme: AGILE.

Significant contributionfrom local authorities, withdynamic, determinedproject owning

In contrast to other regional SPDs, the State provides only a relativeshare (50%) of the public national contributions in the context of thePlanning Contract. The regional and departmental authorities act asowners for many of the projects (road infrastructure, water transfer,vocational training, educational infrastructure, etc.). These authoritieshave considerable financial autonomy.

A culture of initiativeproviding a regular sourceof projects

With community and national subsidies amounting to 300 € per capitaand per year (in the framework of the initial SPD and REGIS), Réunionhas received an allocation that is more than 50% higher than the averagefor France's overseas departments (this can be relativized due to the highpopulation growth). This credit has been absorbed quite easily, given thenumber of projects that the island is capable of initiating each year. Incontrast to other regions, there has been no great difficulty in mobilisinglocal matching. SMEs and craftsmen presented numerous projects.Similarly, ESF credit has been used by training and reintegration agents.

Social cohesion, making iteasier for effects to bemultiplied and informationto circulate

All observers agree that the island's population displays considerablesocial and cultural cohesion. In spite of the relief, there is nocompartmentalisation. The Commissariat à l'Aménagement des Hautssupports initiatives by joint project sponsors, associations orentrepreneurs, in the highland areas. This cohesion is no doubt explainedby the small number of communes (24), most of which have a coastalarea and mountain area. The people of Réunion know the possibilities ofthe programmes and have a conviction of belonging to Europe.

Obstacles ArgumentRéunion is subject toEuropean decisions that areill suited to its insularityand geographical situation

With regard to the fisheries sector, European sanctions were imposed in1997 because France failed to comply with the objectives of the MAGF.And yet economically promising projects that had nothing to do with thepreservation of North Sea or Atlantic Coast resources were blocked forseveral years. The budget initially forecasted was reduced by 50%.

The energy of coordinators(AGILE, training services)is largely taken up withprocedures at the expense

This is especially the case in the new Programme, and was less true onthe 1994-1999 period.The time taken up by these services in administrative procedures isgreater than that spent on identifying good projects and supporting



of assistance and support toproject managers

initiatives. Programme monitors' demands means that decisions aresubject to permanent "legal insecurity", in an administrative environmentthat is constantly changing.

Insufficient long-termstrategic thinking on theeconomy of Réunion andits role in Europe

The considerable short-term impact of "catching up" in terms ofinfrastructure, access to education and vocational training, incomes andsocial minimum wages and hence consumption patterns, is currently aburning issue.Private initiatives are geared more towards investment connected withimports and distribution, that are not funded through the programme.Where are the forums for discussions between local government officialsand representatives from the business world on an overall strategy for theisland, on its contribution to European trade, on its place in the IndianOcean? The considerable aid provided by Europe could be anopportunity to think about generating lasting and more balanceddevelopment for the island.

(…)



Regional case studyObjective 1 – French Hainaut

(in Nord Pas de Calais)

(…)

2. Appropriateness of strategies adopted and pursued 1994-1999(…)

2.3. Appropriateness of strategy adopted in 1994Comments upon interviews and documents analysedSome of the regional representatives we met think that the programme could be considered asan "Objective 2 bis", as there was no analogy for example with what was done in theObjective 1 area in Belgium (Hainaut Belge) : the strategy had been elaborated globally forthe whole "coal basin", but "artificially" divided into two programmes Objective 1 and 2.Both programmes had the same strategic objectives (the only difference was in terms ofsubvention rates).

According to the interviewees, the programme was appropriate to tackle the problematics of azone in a depression spiral and which was massively losing jobs. The area did not have thesufficient means/forces by itself, and needed joint efforts. It suffered from an internal loss ofconfidence but also suffered from a bad image (low confidence from investors).

The strategy was good, as it had different terms :

- short term : direct support to investment in enterprises (a "psychological" shock onthese enterprises was expected),

- mid term : support to research and vocational training,

- long term : improvement of living environment

According to some of the people in charge that were interviewed, the companies investmentswould have nevertheless been made even without the existing programme. On the contrary,the action on the university sector, the research and the culture was one of the key points ofthe programme.

As far as agriculture is concerned, the programme copied for some parts the national policyand forecasted additional aids notably to modernise small farms concerns.

Opinion of the consultantThe choices made in the SPD corresponded to the economic needs of the area : in 1994, 34%of employment in the area was in the industrial sector (vs. 30% as European average). Theregional economy was traditionally based on coal, and the Nord Pas-de-Calais region hadremained a fragile industrial region : the economic conversion of the region in the 80s hadbeen based upon more recent industries (automobile and rail equipment).



Transports were thus a key main line for the requalification of the territory, as it entered aperiod of technological mutation and better productivity. They were hence advisedlysupported by the programme.

As far as SMEs are concerned, the aim was to rebuild a network of subcontractors linked tothe new principals.

3. Effectiveness3.1. Global approach to effectivenessComments upon interviews and documents analysedThe level of effectiveness of the programme (i.e. outputs or results compared to initial goals)varies along the priorities.

Very strong Strong Adequate WeakTransports (infrastructures) xEnergy (infrastructures)TICEnvironment xR & D xSME xHuman resources development xRural development x

Weak pointsThe initial programme was based on supporting employment, but the programme was muchmore successful in exogenous terms than in endogen terms : a great number of big foreign ornon-local firms came to settle in the area (notably thanks to the Special Fund forEstablishment30). Some representatives believe that the programme was not successfulenough on the major problem which was unemployment.

Strong pointsThe good results in some areas was strongly linked to local initiatives of management througha “unique speaker”, which simplified the process of preparing and presenting files for projectholders.

Opinion of the consultantDuring the period 1994-1999, it seems that the good employment figures (especially in theemployment area of Valenciennes : +12%) hide the fact that the shortcomings in terms of

30 The Nord Pas de Calais region benefited from a Special Fund for Establishment (FSI), created in order to help the bigcompanies to settle on the local territory. The help programme has been notified to the Commission and is from then alignedwith the PAT programme (N 782/99).



employment have been compensated mainly thanks to exogenous development of theactivities.


Thematic comments• Transports

• Roads

Comments upon interviews and documents analysedThe efficiency of the programme has been only mitigated in terms of roads : initially, in theprogramme negotiations, it was planned to put the stress on transports, and notably the East-West structuring of infrastructures, with 2x2 lanes main roads that were to link up the threepoles of Douai, Valenciennes and Maubeuge. However, as the funding split was negotiated,some redefinitions were decided : the modernisation of the East-West main road has thus beendropped to concentrate on supporting the urban renewal in Douai and Valenciennes.

The stress has from then on been put on two main roads : the RN49 between Valenciennesand Maubeuge, and the N2 between Maubeuge and Avesnes-sur-Helpe.

Some of the people in charge regret that the « mining by-road » between Douai andValenciennes has been dropped, for it was supposed to play a structuring role in the part thatwas hit the hardest of the Objective 1 area.

The achievements were only late : Maubeuge’s bypassing is still to be done, and the RN2 hasnot been redeveloped. The widening of the RN49 was nevertheless really beneficial to theSambre-Avesnois.

Opinion of the consultantIt is no doubt a shame that the East-West main road structuring has been dismissed toconsider other developments. The Avesnes’ area having indeed already been dismissed fromthe motorway policies in the 1980ies (to the benefit of the North), it could have benefitedfrom this territorial opening up.

The fact that the processes forecasted on the RN2 are only in a « study » phase comes fromthe difficulty to mobilize funds. Those operations have been replanned on the programme2000-2006. As long as the RN2 has not been renovated, it is difficult to evaluate the impact ofthe territorial opening up of the Avesnes-Fourmies’ area.

• Rail

Comments upon interviews and documents analysedThe deflating coefficient has been used to improve the rail links, especially in the linksbetween the Sambre and Lille, via Valenciennes.

The programme has thus allowed the requalification of some stations, the removal of a levelcrossing, and the improvement of services on this route. The aim, which was to reduce thetime needed to travel from Maubeuge to Lille to less than one hour, has been reached at the



very end of the programme, and should enable to improve the rotating migrations betweenthose two cities. But it is yet too early to measure the transport steam between those two citiesto see whether there is a development.

Opinion of the consultantThanks to the improvement of road and rail transports, Valenciennes has come closer to theneighbourhood cities and from now on plays a ‘relay’ role.

Valenciennes, and globally the Nord Pas de Calais region are in a process of qualifying for anindustrial pole for land transport at an international level, notably around the C3T(Technologic Centre in land transports) and the Rail Trials Centre. This can only reinforce thedevelopment of firms from that sector on the territory.

• Telecommunication and information societyComments upon interviews and documents analysedInitially, the programme had not forecasted any specific support to the T&I companies. To theOn the region’s initiative, a measure has been added to the SPD in 1997, and notably enabledto support the creation of the numeric images Pole in Valenciennes, as well as real estateprogrammes around the T&I companies; this is for example the case of the AteliersNumériques of Valenciennes (reception structure that offers to projects holders offices readyfor immediate occupation).

Some of the people in charge stress that the development of a numeric pole in Valenciennes isa way to open the area to other sectors than the two pre-eminent ones : the automobile and railindustries.

During the period 1994-1999, more than a third of all projects have been devoted to primary,upper and professional education in order to prepare actively to face the challenges ofTelecommunication and Information Society. Among other projects, the equipment of middleand high schools has thus been supported (Edunet) as well as the development of projects ofthe Valenciennes University, of Supinfocom and of the Ecole des Mines of Douai in relationwith the Chamber of Commerce of Douai for one programme.

Three other important sectors also benefited from strategic projects : economy (8 projects),culture (6 projects) and telemedicine ; a certain number of collective actions has thus beensupported notably by the Chamber of Commerce of Valenciennes as well as main projectslike the Anneau Citoyen Valenciennois, a unique project in Europe up to this day : it consistsin fact of an extranet (network that links intranet sites) which will allow a progressive accessto Telecommunication and Information Society in all fields of the everyday life inValenciennes (culture, city and public-spiritedness, commerce and companies, housing,employment, education). Three projects have been dedicated to transports (among whichTranscarte, microchip card system for transports in Lille’s suburbs). Twenty-five cyber-centres or information/awareness places have been set.

Fifty-four direct jobs in T&I companies have been created during the period 1996-1999thanks to the ERDF. The strong implication in the Objective 1 area of major actors such aslocal authorities, Chambers of Commerce, the University, hospitals, state educationauthorities and education organisms allowed the emergence of projects that were strategic forthe future of this part of Nord Pas de Calais.



Opinion of the consultantThe Region had been since 1994 at the origin of the Initiative Interrégionale pour la Sociétéde l’Information (IRISI) with the strong collaboration of the State and of major public andprivate actors in the area. This initiative supported by the Commission aimed at creatingfavourable conditions to develop new uses of the information technologies.

The T&I companies hence expand progressively in the local economy, but the offer is stillvery concentrated and is not spread homogeneously on the territory. If one considers aspecificity indicator (ratio jobs generated by T&I companies in the overall local jobs to thejobs created by the T&I companies at the national level, Paris area excluded), the economicarea of Lille is highly above, whereas the Objective 1 area stays below the regional average.

• SMEsComments upon interviews and documents analysedThe industry representative stresses that its region is the third in France for the weight ofSMEs in the industry. According to our interviewees, the programme effectiveness has beenvery strong concerning the needs of SMEs. The financial tools were well adapted to theproblems of SMEs and the vetting services were used to use those tools (thanks to previousprogrammes in the last decade like the Contrat de Plan Etat-Région). The ERDF enabled toreinforce this action. He considers that the programme has reached his goal in terms ofredynamisation of the area, even if some districts benefited more from it than others(Valenciennes and even Douai more than the Sambre).

But in addition to the PAT (Territorial Development Subsidy), the existence of a tool, calledthe Special Fund for Establishment31, also enabled to help big companies. This fundcontributed to maintain jobs, notably in firms that were likely to go bankrupt.

The support of structural funds to the projects led in the frame of this fund allowed tomaintain some activities in the region, as they were likely to go abroad.

The European programmes contributed to settle an economic synergy.

Comments of the consultantIf the programme succeeded as far as support to SMEs is concerned, it is mainly because theObjective 1 area was abundantly endowed compared to its needs in terms of support to theindustry. The aid from structural funds allowed to capture projects in high unemploymentareas.

• Education and training / UniversityComments upon interviews and documents analysedThe programme notably enabled the modernisation of equipments as well as the acquisition ofpedagogic material to allow the students to increase their chances of getting a betterqualification, and to facilitate their professional insertion. However, it is necessary to stressthe fact that the number of the Young in the employment area of Douai, Valenciennes andAvesnes accessing the education level IV is still below the local average32. 31 FSI (Fonds Spécial d'Implantation) : State aid notified to the European Commission.32 Source : SPD 2000-2006



As far as superior education is concerned, the programme supported among others thedevelopment of associated research in the university pole of Valenciennes (UVHC, Universitéde Valenciennes et du Haut-Cambrésis). The actions permitted the creation of laboratoriesand the acquisition of equipments.

In terms of infrastructures, the programme allowed Valenciennes to build offices for the lawfaculty and for two IUT, a library and a university restaurant. On Douai site, the law facultyand the library associated to the Artois University as well as a university restaurant have beenbuilt. The European funds’ intervention permitted to speed up the settlement of law researchin Douai. At last, in Maubeuge, the programme enable to take into account the officesdevelopment and the equipment of the Institut Polytechnique du Hainaut Cambraisis (IPHC).

Opinion of the consultantOne may wonder about the increase in the number of sites, with, on Maubeuge’s site of theUVHC, an IUT « physics measures », an MST « processing and use of new materials ».However, the territorial network created by the UVHC seems to allow some young students toget education in some leading fields whereas they would not have been able to train elsewheredue to the lack of means. It is now necessary to make sure that those well trained students canfind a job outside the area, for the local companies won’t be able to hire technicians forever.

• Research & DevelopmentThe procedures of support to technologic development in the companies (especially FRATTand ATOUT) didn’t get the expected success. The area being indeed marked by the existenceof big companies, the SMEs are often only subcontractors that don’t have their own products,and hence little strategy of Research & Development. This action didn’t rise bid interestamong SMEs.

On the opposite, one can stress the support of the programme to the launching anddevelopment of the C3T (Centre de Compétences Technologiques pour les TransportsTerrestres), which among others aimed at optimising the relations between the network ofresearch laboratories competencies and the local industrial environment. The programme alsopermitted to support the creation of Valutec, a limited company created by ValenciennesUniversity in November 1998 to provide services and obtain research contracts in two fields :land transports (via C3T) and food industry (via CITIA, Centre d'Innovation et de Transfertpour l'Industrie Agro-Alimentaire).

• Rural developmentThe programme concerns only a small part of the Nord department, but, according to thepeople we met, the Agricultural Chambers, and some local authorities don’t wish to leaddramatically different actions in this area, in order to avoid to treat unfairly the rest of thedepartment. It seems that the programme was not used at its best : public action was limited,to avoid discrimination…

During the period, the structural funds (EAGGF) intervened mainly on Objective 1,INTERREG and LEADER.



On Objective 1, the major goals were the economic side of farm concerns and the farmindustry on the one hand, and the development linked to farm concerns (regrouping of lands,draining off) on the other hand.

As far as big farm concerns are concerned, the programme reinforced them (the majoritywould have survived anyway) and modernised them. The little and medium farm concernsdidn’t have access to the standards implementation programme, whereas they were the mostnumerous in the area. The people we met hence regret the lack of ambitious policy for thesmall concerns, due to the lack of compensation.

The collective actions and farm animation came late in the programme (mainly since 1998).Their implementation often proved to be difficult due to less good receptivity of the farm andrural world of the Objective 1 area.

According to our interviewees, it is not proved that the concerns in Objective 1 disappear lessquickly as anywhere else in Nord Pas de Calais. However, the figures of the 2000 agriculturalcensus show on the Nord department an slower annual reduction of the number of concernsbetween 1988 and 2000 than in the total Nord Pas de Calais Region (-4,2% versus –4,5%).


Factor of success ArgumentFactor external to theprogramme : the companiesdynamic

In some sectors like the support to the SMEs development, it seems thatthe programme’s efficiency depends from a set of factors, among whichthe dynamic of companies, which found answer to their investmentsambitions, with possibilities of financing. The instructor services didn’tneed to look for projects holders.

Implementation In this sector (support to SMEs) the fact that the measure’s managingservices had been used to the use of different financing (national andEuropean) contributed to the efficiency.The postponement from December 2001 to September 2002 of the end ofthe programme enabled to increase the achievement rates.

Partnership andconcentration

In some areas, the fact that all the projects go through a « uniquespeaker » (Conversion Pole) enabled the increase the efficiency in thetreatment of files (a unique speaker from the preparation of the project tothe financing).

Obstacles ArgumentReluctance of the projectscarriers

In agricultural matter, it seems that some potential project holders(agricultural Chambers), after the initial "euphoria" at the beginning ofthe programme eventually lacked initiative, notably because they didn’twant to create distortions with the other local areas which didn’t benefitfrom the EAGGF.

Weak capacity of potentialprojects carriers

In the social and health sector where rather consequent means had beenforecasted, few projects were achieved, due to a lack of structures withhuman and financial capacities to carry the projects.At the end of the programme, it also appeared that some weak localauthorities didn’t have the necessary resources to co-finance theoperations.

(…)