Nikos Chryssanthou

The Future of European Regional Policies in The Future of European Regional Policies in the context of Reviewing the EU Budgetthe context of Reviewing the EU Budget European Forum for Northern Sweden, 25-26 October 2007European Forum for Northern Sweden, 25-26 October 2007

By Nikos Chryssanthou: DG REGIO, Unit B2

EUROPEAN COMMISSION Regional Policy 2

The Budget Review

In agreeing on the financial perspectives for 2007-13 in May 2006, the European Institutions agreed that the Commission should undertake a fundamental review of the EU budget.

The budget review is an ambitious policy-driven exercise which examines to which extend are the EU spending priorities matching the policy agenda of the Union for the next decades.


The Budgetary Review

There are essentially three key aspects to this examination

1. The new risks and challenges arising at world and European level (economic, social and demographic).

2. and, having identified the risk challenges, how to address them. Within this framework, there is the issue of the added value of using the EU budget to tackle the challenges.

3. The ongoing EU political and institutional changes as well as the lessons from former enlargements.


The timetable for the rest of the budgetary debate

1. The Commission has recently adopted an issue paper which launches the debate on the EU budget

2. The document has gone into public consultation (deadline April 2008)

3. This will be followed more or less immediately by a major political conference in Brussels

4. The Commission will produce proposals for the reform of the budget towards the end of 2008 or the beginning 2009

5. around 2010/2011, with a new EP and Commission a concrete proposal with financial figures on the next financial perspective will be presented.


The Context for the reflexion on the Future of the Cohesion Policy• The publication of the 4th Cohesion Report (May

2007)• Cohesion Forum in September 2007 launched

the public consultation (deadline January 2008)• In Spring 2008 the Commission will report the

results of the Public Consultation• The 5th Cohesion Report is due in 2010/11 which

should contain detailed proposals for the policy after 2013


The Reform of Cohesion Policy 2007-13; CP value added• The concentration of resources on investment• The respect for the rules of the single market• The emphasis on job creation in new activities,

on enterprise formation and innovative activities• The contribution to partnership and good

governance• The leverage effect


The reform of CP: the emergence of a new paradigm in EU regional policy

• Allocating resources on key, growth enhancing investment

• Multi-sectoral approaches versus sectoral interventions

• Stresses the opportunities for future by mobilising underexploited potential

• Recognise the importance of dialogue and collaborative approaches between levels of governments


Challenge 1: Challenge 1: demographydemography

85 regions (mainly in the new Member States) are already experiencing absolute population decline, and another 76 regions maintain population growth only thanks to migration


Challenge 1: Challenge 1: demographydemography

In large parts of Spain, Italy, and Greece there are only 2 people in employment for every person above retirement age compared to an average for the Union of around 3 people


Challenge 2: Challenge 2: industrial industrial patterns and patterns and restructuringrestructuring

39 regions have more than 3% of their total employment concentrated in the clothing, textile and leather industry (twice the average of the Union), reaching 13% in the Norte region of Portugal


Challenge Challenge 3: 3: climateclimate changechange

7% of the EU population live in areas at high risk of flooding (red and orange colour)

In 45 provinces (NUTS III), over 20% of the population is at risk


Challenge 4Challenge 4Situation Situation and trends: and trends: regional regional disparitiesdisparities

In 2004, the top regions (with 10% of the EU population) had a GDP per head that was almost 5 times higher than that in the bottom regions (with 10% of the EU population), while in 2000 it was 6 times higher


Challenge 4: Situation and trends: Challenge 4: Situation and trends: regional growthregional growthOver the period 1999-2004, growth at the regional level in two of the main economic competitors of the Union (China and India) was between 2 and 3 times higher then in the EU regions


What role for the EU?

• To maintain the freedoms enshrined in the single market in a EU with very wide disparities between the 27 Member States in terms of their competitiveness, will continue to require policy intervention offering compensation from EU level. If this is accepted there is a cascade of questions concerning the level of ambition and nature of the compensation effort:


What role for the EU

• Should Cohesion policy shift from compensating regions disparities to persons?

• If inter-personal are inappropriate should we organise interventions more sectorally or more geographically?

• If the geographical approach is to be retained, should it be organise at national or regional level?


Questions regarding the nature of Regional policy• what future for an approach based closely on the Lisbon

strategy for growth and jobs?• - how should the new challenges outlined above be

addressed under regional policy?• - can we do more to involve other sources of

finance, from the private sector and from the international banking sector?

• - have we reached the right balance between Community, national and regional involvement in implementing the policy?

• - what scope is there for introducing a payment by results system with specific targets?


Cohesion policy contributes to the Cohesion policy contributes to the growth of GDPgrowth of GDP

Preliminary estimates for the period 2000-2013 (2004-2013 for the new Member States) suggest an increase in GDP compared to a baseline scenario without cohesion policy by:

• Around 9.0% in the Czech Republic Latvia• Around 8.5% in Lithuania, and Estonia• Around 7.5% in Romania• Around 6.0% in Bulgaria and Slovakia• Around 5.5% in Poland• Around 3.5% in Greece and 3.1% in Portugal

Nikos Chryssanthou

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