Transcript Regional Policy - John Birchall

EUROPEAN COMMISSION
Regional Policy
Regional Policy
EUROPEAN COMMISSION
Regional Policy
What is regional policy?
• Article 158 of the Treaty states that:
"in order to strengthen its economic and social cohesion,
the Community shall aim at reducing disparities between
the levels of development of the various regions and the
backwardness of the least favoured regions or islands,
including rural areas"
• also called:
–
–
–
–
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cohesion policy
structural policy
refers to the Structural Funds
or "EU money"!
EUROPEAN COMMISSION
Regional Policy
Origins
Treaty of Rome set up:
• CAP
• European Social Fund
• No specific provision for regional policy or
regional fund
Why?
• Common market thought to be enough
• Strong economic growth in 1950s and
1960s
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EUROPEAN COMMISSION
Regional Policy
Why change?
• Recession of 1970s highlighted
development gaps
• Regional disparities increased with
accession of:
– 1973: UK, Ireland and Denmark
– 1981: Greece
– 1986: Spain and Portugal
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EUROPEAN COMMISSION
Regional Policy
Why is regional policy important?
Socio-economic cohesion considered to be a priority
for the European Union
Second most heavily funded sector in the Union after
the Common Agricultural Policy.
From less than 5% of 1975 budget to 35% of 1999
budget
€ 233 billion. (approximately £ 160 billion)
Visible sign of the EU
Promotes convergence (helping poorer regions
develop)
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EUROPEAN COMMISSION
Regional Policy
Economic rationale
• Effects of single market on regional
disparities
• Migration to rich areas not poor
• Less mobility in Europe
• Social costs
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EUROPEAN COMMISSION
Regional Policy
Political rationale
• need to legitimize the new
economic and political order
• fiscal and monetary policy seen as
not being enough
• "sweetener" for Member State
accession
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EUROPEAN COMMISSION
Regional Policy
Slow economic growth:
since the mid-1990s, EU growth has averaged just over 2%
per year
Greater differences between regions and Member
States:
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regional disparity levels are higher than national disparities
but are also falling
Over ¼ of EU-25 population lives in regions below 75% of
EU average GDP
13 Member States of EU-25 have GDP below 90% of
average – 21% of population
EUROPEAN COMMISSION
Regional Policy
Regional Disparities in EU27
GDP per head in % in PPP (2002)
<50
50 - 75
75 - 90
90 - 100
100 - 125
 125
Index, EUR-27 = 100
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EUROPEAN COMMISSION
Regional Policy
EU regional policy
2000-06
40% to 49,9%
of EU population
(155→224 Mio.) in eligible
areas (Obj. 1 & 2)
233 bn. Euro
(one third of the EU
budget)
400 to 480
Structural Funds
programmes
211 to 264
Regions
EUROPEAN COMMISSION
Regional Policy
How does it work?
Objective 1:
• funding for regions with average per capital GDP
less than 75% of EU average remote regions, e.g.
French overseas départements, the Azores,
Madeira and the Canary Islands
• in the UK: Cornwall, Merseyside, South Yorkshire
• approximately 2/3 (69.7% )of total fund or € 135.9
billion;
• 20% of total EU population benefit
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EUROPEAN COMMISSION
Regional Policy
How does it work?
Objective 2:
• for regions with structural difficulties or in need of
economic diversification
• e.g. declining rural areas, regeneration of urban
areas
• in the UK: North Yorkshire, NW and NE England,
West Midlands, Tower Hamlets in London, etc.
• 11.5% of total fund or € 22.5 billion
• 18% of total EU population
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EUROPEAN COMMISSION
Regional Policy
EU Structural Funds 2000-06
Amounts available in bn Euro;
for new Member States: 2004-2006
60
Objective 1
50
Objective 2
Objective 3
40
Community Initiatives
Cohesion Fund
30
20
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AT BE CY CZ DK EE FI FR DE GR HU IR IT LV LT LU MT NL PL PT SK SL SP SW UK
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EUROPEAN COMMISSION
Regional Policy
2007-2013 – the future
EUROPEAN COMMISSION
Regional Policy
New Budget Structure: Regional Policy gains
2006 vs. 2013 in %
50
47,4
45
2006
2013
40,4
40
35,7
32,1
35
30
25
20
15
10
9,9
6,6
6,5
5
0,9
6,4
5,6
6,1
1,5
0
1A Competitiveness
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1B Cohesion
2 Natural resources
3 Justice
4 Global role
5 Administration
EUROPEAN COMMISSION
Regional Policy
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EUROPEAN COMMISSION
Regional Policy
Convergence-Objective:
Regions below 75% of
EU25 GDP
Average 2000-2002
86 Regions
124 million inhabitants
27.3%of EU population
Allocation: EUR 177.8 bn
EUROPEAN COMMISSION
Regional Policy
Objective Regional
Competitiveness and
Employment:
(all other regions)
156 Regions
296 million inhabitants
65.1% of EU population
Allocation: EUR 38.4 bn
EUROPEAN COMMISSION
Regional Policy
Conclusions
• Does it work?
– across Member States yes
– within Member States less
• What will enlargement do (Poland 40 million, Spain
40 million)
– from 15 to 25 Member States
– new Member States are much poorer
– pressure on budget
• Causes friction between member-states
– Poor vs. rich
– South vs. North
– East vs. West
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