Regional Policy Convergence or Divergence. The early days No mention of regional policy or regional...

Regional PolicyRegional Policy

Convergence or DivergenceConvergence or Divergence

The early daysThe early days

No mention of regional policy or regional No mention of regional policy or regional imbalance in the Treaty of Rome.imbalance in the Treaty of Rome.

Why?Why? The six founding member-states were relatively The six founding member-states were relatively

homogenous in economic terms (except for Southern homogenous in economic terms (except for Southern Italy).Italy).

It was thought that the prosperity created by the It was thought that the prosperity created by the creation of a free trade area and a customs union creation of a free trade area and a customs union would generate economic growth throughout the EEC would generate economic growth throughout the EEC as a whole and raise the standard of living as a whole and raise the standard of living throughout.throughout.

The first and second EnlargementThe first and second Enlargement

1973: Ireland, Denmark 1973: Ireland, Denmark and UK (Irl: 60%of EU and UK (Irl: 60%of EU averageaverage

1981 Greece1981 Greece 1986: Spain and Portugal1986: Spain and Portugal

These enlargements These enlargements introduced a ‘regional introduced a ‘regional dimension to EEC, ie. the dimension to EEC, ie. the economic and social economic and social disparities between states disparities between states increasedincreased

Mid 60s the gap in Mid 60s the gap in per capita GDP per capita GDP between the ten between the ten richest and the ten richest and the ten richest regions was richest regions was 4:14:1

By 1980s this was 5:1By 1980s this was 5:1

Regional Policy: modest beginningsRegional Policy: modest beginnings

1975: European Regional Development 1975: European Regional Development set upset up aim was to provide financial assistance for aim was to provide financial assistance for

industrial and infrastructural projects in the industrial and infrastructural projects in the disadvantaged areas.disadvantaged areas.

Funding: originally 5% of EU budget and up Funding: originally 5% of EU budget and up to late 80s, only 7% – 8% of EU budget was to late 80s, only 7% – 8% of EU budget was spent on regional policy (ERDF)spent on regional policy (ERDF)

Regional Policy: A Treaty baseRegional Policy: A Treaty base

Single European Act Single European Act A new Title V: Economic and Social A new Title V: Economic and Social

Cohesion; now TitleXVIICohesion; now TitleXVII• This committed the EC to “reducing disparities This committed the EC to “reducing disparities

between the various regions and the between the various regions and the backwardness of the least favored nations”backwardness of the least favored nations”

Reform of the Reform of the Structural FundsStructural Funds, 1988: , 1988: doubled in size (total : ECU 60bn)doubled in size (total : ECU 60bn)

Regional policy to be based on 4 principlesRegional policy to be based on 4 principles

Principles of Regional Policy(1)Principles of Regional Policy(1)

Additionality:Additionality: Structural funds must add to and NOT Structural funds must add to and NOT

substitute for member-state public substitute for member-state public expenditureexpenditure

Principles of Regional Policy(2) Principles of Regional Policy(2)

Partnership and Programming:Partnership and Programming: EU to work in ‘partnership’ with member EU to work in ‘partnership’ with member

states and regional authoritiesstates and regional authorities

• Ireland: National Development PlanIreland: National Development Plan Community Support FrameworkCommunity Support Framework

Principles of Regional Policy(3)Principles of Regional Policy(3)

Concentration:Concentration: Most funding should be concentrated on Most funding should be concentrated on

where the money is needed!where the money is needed!

Structural Funds: www.europa.eu.intStructural Funds: www.europa.eu.int

four Structural Funds allow the European Union to grant financial assistance four Structural Funds allow the European Union to grant financial assistance to resolve structural economic and social problems :to resolve structural economic and social problems :

the the European Regional Development FundsEuropean Regional Development Funds (ERDF): principal objective (ERDF): principal objective is to promote economic and social cohesion within the European Union is to promote economic and social cohesion within the European Union through the reduction of imbalances between regions or social groups; through the reduction of imbalances between regions or social groups;

the the European Social FundEuropean Social Fund (ESF), the main financial instrument allowing (ESF), the main financial instrument allowing the Union to realise the strategic objectives of its employment policy; the Union to realise the strategic objectives of its employment policy;

the the European Agricultural Guidance and Guarantee FundEuropean Agricultural Guidance and Guarantee Fund (EAGGF - (EAGGF - Guidance Section), contributes to the structural reform of the agriculture Guidance Section), contributes to the structural reform of the agriculture sector and to the development of rural areas; sector and to the development of rural areas;

the the Financial Instrument for Fisheries GuidanceFinancial Instrument for Fisheries Guidance (FIFG), the specific (FIFG), the specific Fund for the structural reform of the fisheries sector. Fund for the structural reform of the fisheries sector.

Cohesion FundCohesion Fund : finances projects linked to the environment and trans- : finances projects linked to the environment and trans-european transport systems of Member States whose GDP is less than 90% european transport systems of Member States whose GDP is less than 90% of the European average, of the European average,

pre-accession structural instrumentpre-accession structural instrument (ISPA), one of three instruments to aid (ISPA), one of three instruments to aid candidate countries in preparation for accession to the European Union, candidate countries in preparation for accession to the European Union, also support expenditure on development of infrastructure in certain also support expenditure on development of infrastructure in certain Member States and candidate countries.Member States and candidate countries.

Relative wealth in the EURelative wealth in the EU

1994: output per head, in NUTS 2 regions in 1994: output per head, in NUTS 2 regions in the 15 member states varied from 196% to the 15 member states varied from 196% to 37.7 % of EU average37.7 % of EU average 10% lived in least prosperous areas, average 10% lived in least prosperous areas, average

GDP per head index of 58GDP per head index of 58 20% lived in areas with a per capita GDP of less 20% lived in areas with a per capita GDP of less

than 75%than 75% 10% lived in areas with average index of 153 10% lived in areas with average index of 153

(Hamburg 196, Oberbayern 161, Brussels 183, Ile (Hamburg 196, Oberbayern 161, Brussels 183, Ile de France 161, regions in the ‘blue banana’ de France 161, regions in the ‘blue banana’ region, region, extendingextending from Greater London, through from Greater London, through Belgium and Netherlands along the Rhine into Belgium and Netherlands along the Rhine into nothern Italynothern Italy

Which regions received EU financial assistance Which regions received EU financial assistance during the 1994-1999 programming periodduring the 1994-1999 programming period

The EU's Structural Funds The EU's Structural Funds targeted financial targeted financial assistance at assistance at disadvantaged regions disadvantaged regions according to priority according to priority objectves objectves 11, , 22, , 5b5b and and 66. .

Map of objective 1 areas 2000-Map of objective 1 areas 2000-20062006

Regions eligible Regions eligible under Objective 1under Objective 1

Phasing-out Objective Phasing-out Objective 1 1

Special ProgrammesSpecial Programmes

Structural Funding Allocation for 2000-06

Structural funds: allocationStructural funds: allocation Resources under the Structural Funds are allocated on the basis of Resources under the Structural Funds are allocated on the basis of

programming periods: the previous programming period ran from programming periods: the previous programming period ran from 1994 to 1999; the present period is 2000-06. Financial assistance is 1994 to 1999; the present period is 2000-06. Financial assistance is in the form of non-refundable grants channelled in three ways: in the form of non-refundable grants channelled in three ways:

Objective Objective programmesprogrammes (94%) (94%)

ERDF, ESF, Guidance part of CAP, Cohesion FundERDF, ESF, Guidance part of CAP, Cohesion Fund Community Initiative Community Initiative ProgrammesProgrammes (5.35%)(5.35%)

- managed in Ireland by ADM- managed in Ireland by ADM

Innovative measuresInnovative measures.(0.65%) .(0.65%)

Programmes are managed by designated authorities in the Member Programmes are managed by designated authorities in the Member States, whereas innovative measures are managed by the States, whereas innovative measures are managed by the Commission itself. Commission itself.

Structural funds: 2000 -2006 Structural funds: 2000 -2006 The Structural Funds: budget of EUR 213 billion for 2000-06. The Structural Funds: budget of EUR 213 billion for 2000-06. Financial assistance targeted under three Objectives (93% of the budget) Financial assistance targeted under three Objectives (93% of the budget)

and four Community Initiatives (5.35% of the budget). and four Community Initiatives (5.35% of the budget). Objective 1Objective 1

Development and structural adjustment of regions whose development is Development and structural adjustment of regions whose development is lagging behind (EUR 135.9 billion); lagging behind (EUR 135.9 billion); Objective 2Objective 2Economic and social conversion of areas facing structural difficulties (EUR Economic and social conversion of areas facing structural difficulties (EUR 22.5 billion); 22.5 billion); Objective 3Objective 3Adaptation and modernisation of national policies and systems of education, Adaptation and modernisation of national policies and systems of education, training and employment (EUR 24.05 billion); training and employment (EUR 24.05 billion);

Coastal areas: Coastal areas: FIFGFIFG, contributes to national programmes to encourage , contributes to national programmes to encourage measures to adapt fisheries structures (EUR 1.106 billion).measures to adapt fisheries structures (EUR 1.106 billion).

Community resources and structural policiesCommunity resources and structural policies

1.271.271.21.10Total payment as % of EC GDP

97.284.169.245.3Total: billion ECU

2.8%3.1%2.2%Cohesion Fund

35.4%32.6%28.6%19.6%Structural funds

45.8%45.7%50.9%60.7%Ag price support

2000-199919931988

Regional aidRegional aid

Investment Investment competition: - firms competition: - firms played one area off played one area off another as another as governments tried to governments tried to influence where these influence where these firms set upfirms set up

Government Government competition: irrational, competition: irrational, wastefulwasteful

Some examples:Some examples: Ford-VW joint venture to Ford-VW joint venture to

make minivans in Setubal make minivans in Setubal near Lisbon£360 million of near Lisbon£360 million of the £1.8 billion paid by EC the £1.8 billion paid by EC and Portuguese and Portuguese government; government;

• Overall public share of Overall public share of cost, 40%cost, 40%

Italy: govt. paid 50% of Italy: govt. paid 50% of American Texas American Texas Instruments’ Avezzano Instruments’ Avezzano plantplant

Case studies of activities Case studies of activities undertaken with EU fundingundertaken with EU funding

Stepping StonesStepping Stones Women in AgricultureWomen in Agriculture ESB Links Island CommunitiesESB Links Island Communities Rural Post Office Development Rural Post Office Development ProgrammeProgramme.. VTOSVTOS Sea Research Vessel - Celtic Voyager.Sea Research Vessel - Celtic Voyager. Enterprise Link - Dublin/Belfast RailwayEnterprise Link - Dublin/Belfast Railway LoughLough DergDerg CatchmentCatchment Protection Scheme. Protection Scheme.

http://http://www.csfinfo.com/htm/case_studies/index.htmwww.csfinfo.com/htm/case_studies/index.htm NDP/CSF Information OfficeNDP/CSF Information Office

15 Hatch Street15 Hatch StreetDublin 2Dublin 2Telephone: 01 6396280 Telephone: 01 6396280 LoCall: 1890 230 030LoCall: 1890 230 030Fax: 01 639 6281Fax: 01 639 6281

Public Office Open: Public Office Open: Monday - Friday 10.00 am - 12.30 pmMonday - Friday 10.00 am - 12.30 pmand 2.00 pm - 4.30 pmand 2.00 pm - 4.30 pm

Useful documentsUseful documents

Sixth Periodic Report on the social and Sixth Periodic Report on the social and economic situation and development of economic situation and development of the regions of the European Unionthe regions of the European Union http://www.europa.eu.int/comm/http://www.europa.eu.int/comm/

regional_policy/dwnld/pdf/radi/en/2_s1_en.pdf regional_policy/dwnld/pdf/radi/en/2_s1_en.pdf





OPINIONOPINIONof the Committee of the Regionsof the Committee of the Regions

of 12 April 2000of 12 April 2000on theon the

Sixth Periodic Report on the Social and Economic SituationSixth Periodic Report on the Social and Economic Situationand Development of Regions in the European Unionand Development of Regions in the European Union

(SEC(1999) 66 final)(SEC(1999) 66 final)

1.1. A decade on, it is still the same 25 regions that are least affected by A decade on, it is still the same 25 regions that are least affected by the problem. In the regions with least access to work and jobs, the the problem. In the regions with least access to work and jobs, the unemployment rate has risen over the same period from 20% to 24%, unemployment rate has risen over the same period from 20% to 24%, in contrast to the 4% rate in the more privileged areas. Long-term in contrast to the 4% rate in the more privileged areas. Long-term unemployment is on the increase, along with unemployment among unemployment is on the increase, along with unemployment among young people looking for their first job.young people looking for their first job.

2.2. There has been There has been genuine convergencegenuine convergence, and notes that over the last , and notes that over the last 10-year period, GDP in the 10 regions where it was lowest has risen 10-year period, GDP in the 10 regions where it was lowest has risen from 41% of the EU average to 50%. It also mentions that the GDP of from 41% of the EU average to 50%. It also mentions that the GDP of the 25 poorest regions is up from 52% to 59% of that average, while the 25 poorest regions is up from 52% to 59% of that average, while the GDP of the four "cohesion" countries has shifted from 65% to the GDP of the four "cohesion" countries has shifted from 65% to 76.5% of the average (estimated at 78% for 1999). It states in 76.5% of the average (estimated at 78% for 1999). It states in particular that trade between those four countries and the Member particular that trade between those four countries and the Member States of the Union doubled over the same period.States of the Union doubled over the same period.

Future of Regional PolicyFuture of Regional Policy The future of regional policy: debate in the The future of regional policy: debate in the

European Parliament European Parliament (27 September 2001) (27 September 2001) Regional policy was a focal point of the European Regional policy was a focal point of the European

Parliament plenary session of 19-20 September. Parliament plenary session of 19-20 September. Mrs Annemie Neyts-Uyttebroeck, on behalf of the Mrs Annemie Neyts-Uyttebroeck, on behalf of the Belgian Presidency of the EU Council, and Belgian Presidency of the EU Council, and Commissioner Michel Barnier seized the Commissioner Michel Barnier seized the opportunity to present the first reflections in the opportunity to present the first reflections in the debate on the future of cohesion policy and to debate on the future of cohesion policy and to outline the coming stages, in terms of both outline the coming stages, in terms of both procedure and substance.procedure and substance.

• http://www.inforegio.cec.eu.int/http://www.inforegio.cec.eu.int/

66thth Report Report

map 29 of the report gives a remarkable map 29 of the report gives a remarkable summary of the reality of the centre-summary of the reality of the centre-periphery relationship as it stands in periphery relationship as it stands in Europe.Europe.

http://www.europa.eu.int/comm/regional_phttp://www.europa.eu.int/comm/regional_policy/document/doc1_en.htmolicy/document/doc1_en.htm


http://www.europa.eu.int/comm/http://www.europa.eu.int/comm/regional_policy/document/doc1_en.htmregional_policy/document/doc1_en.htm


http://www.europa.eu.int/comm/http://www.europa.eu.int/comm/regional_policy/document/doc1_en.htmregional_policy/document/doc1_en.htm

List of ERDF programmes in the EU in chronological List of ERDF programmes in the EU in chronological order - 1999order - 1999

Date of Adoption Title Type of Intervention ProgramsDate of Adoption Title Type of Intervention Programs- - AthensProvision of gas-fuelled bus and a natural gas AthensProvision of gas-fuelled bus and a natural gas

stationOPstationOP 18/06/9918/06/99

Belgium URBAN Bruxelles-Capitale (Anderlecht)CIPBelgium URBAN Bruxelles-Capitale (Anderlecht)CIP 20/05/9920/05/99

INTERREG II C E / F / IRL / P / UK Atlantic Area CIPINTERREG II C E / F / IRL / P / UK Atlantic Area CIP 27/04/9927/04/99

Italy "Crisis area of Gela" (Sicile) - Global GrantGGItaly "Crisis area of Gela" (Sicile) - Global GrantGG 11/03/9911/03/99

Spain Territorial Employment Pacts (Obj.1)OPSpain Territorial Employment Pacts (Obj.1)OP 02/03/9902/03/99

Italy "BIC Basilicata" - Global GrantGGItaly "BIC Basilicata" - Global GrantGG 11/02/9911/02/99

Italy "Alimentaria" - Global GrantGGItaly "Alimentaria" - Global GrantGG

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