Transcript Regional Policy

Regional Policy
Convergence or Divergence
The early days
No mention of regional policy or regional
imbalance in the Treaty of Rome.
 Why?


The six founding member-states were relatively
homogenous in economic terms (except for Southern
Italy).
It was thought that the prosperity created by the
creation of a free trade area and a customs union
would generate economic growth throughout the EEC
as a whole and raise the standard of living
throughout.
The first and second Enlargement



1973: Ireland, Denmark
and UK (Irl: 60%of EU
average
1981 Greece
1986: Spain and Portugal

These enlargements
introduced a ‘regional
dimension to EEC, ie. the
economic and social
disparities between states
increased

Mid 60s the gap in
per capita GDP
between the ten
richest and the ten
richest regions was
4:1
 By 1980s this was 5:1
Regional Policy: modest
beginnings
 1975:
European Regional Development
set up


aim was to provide financial assistance for
industrial and infrastructural projects in the
disadvantaged areas.
Funding: originally 5% of EU budget and up
to late 80s, only 7% – 8% of EU budget was
spent on regional policy (ERDF)
Regional Policy: A Treaty base
 Single

European Act
A new Title V: Economic and Social Cohesion;
now TitleXVII
• This committed the EC to “reducing disparities
between the various regions and the
backwardness of the least favored nations”


Reform of the Structural Funds, 1988:
doubled in size (total : ECU 60bn)
Regional policy to be based on 4 principles
Principles of Regional Policy(1)
 Additionality:

Structural funds must add to and NOT
substitute for member-state public
expenditure
Principles of Regional Policy(2)
 Partnership

and Programming:
EU to work in ‘partnership’ with member
states and regional authorities
• Ireland: National Development Plan
Community Support Framework
Principles of Regional Policy(3)
 Concentration:

Most funding should be concentrated on
where the money is needed!
Structural Funds: www.europa.eu.int

four Structural Funds allow the European Union to grant financial assistance
to resolve structural economic and social problems :

the European Regional Development Funds (ERDF): principal objective
is to promote economic and social cohesion within the European Union
through the reduction of imbalances between regions or social groups;

the European Social Fund (ESF), the main financial instrument allowing
the Union to realise the strategic objectives of its employment policy;

the European Agricultural Guidance and Guarantee Fund (EAGGF Guidance Section), contributes to the structural reform of the agriculture
sector and to the development of rural areas;

the Financial Instrument for Fisheries Guidance (FIFG), the specific
Fund for the structural reform of the fisheries sector.
 Cohesion Fund : finances projects linked to the environment and transeuropean transport systems of Member States whose GDP is less than
90% of the European average,
 pre-accession structural instrument (ISPA), one of three instruments to aid
candidate countries in preparation for accession to the European Union,
also support expenditure on development of infrastructure in certain
Member States and candidate countries.
Relative wealth in the EU

1994: output per head, in NUTS 2 regions in
the 15 member states varied from 196% to
37.7 % of EU average



10% lived in least prosperous areas, average
GDP per head index of 58
20% lived in areas with a per capita GDP of less
than 75%
10% lived in areas with average index of 153
(Hamburg 196, Oberbayern 161, Brussels 183, Ile
de France 161, regions in the ‘blue banana’
region, extending from Greater London, through
Belgium and Netherlands along the Rhine into
nothern Italy
Which regions received EU financial assistance
during the 1994-1999 programming period
The EU's Structural Funds
targeted financial
assistance at
disadvantaged regions
according to priority
objectves 1, 2, 5b and 6.

Map of objective 1 areas 20002006

Regions eligible
under Objective 1
 Phasing-out Objective
1
 Special Programmes
Structural Funding
Allocation for 2000-06
Structural funds: allocation


Resources under the Structural Funds are allocated on the basis of
programming periods: the previous programming period ran from
1994 to 1999; the present period is 2000-06. Financial assistance is
in the form of non-refundable grants channelled in three ways:
Objective programmes (94%)

ERDF, ESF, Guidance part of CAP, Cohesion Fund
Community Initiative Programmes (5.35%)
- managed in Ireland by ADM

Innovative measures.(0.65%)

Programmes are managed by designated authorities in the Member
States, whereas innovative measures are managed by the
Commission itself.
Structural funds: 2000 -2006

The Structural Funds: budget of EUR 213 billion for 2000-06.
 Financial assistance targeted under three Objectives (93% of the budget)
and four Community Initiatives (5.35% of the budget).
 Objective 1
Development and structural adjustment of regions whose development is
lagging behind (EUR 135.9 billion);
Objective 2
Economic and social conversion of areas facing structural difficulties (EUR
22.5 billion);
Objective 3
Adaptation and modernisation of national policies and systems of education,
training and employment (EUR 24.05 billion);
Coastal areas: FIFG, contributes to national programmes to encourage
measures to adapt fisheries structures (EUR 1.106 billion).
Community resources and structural policies
1988
1993
1999
2000-
Ag price
support
60.7%
50.9%
45.7%
45.8%
Structural
funds
19.6%
28.6%
32.6%
35.4%
2.2%
3.1%
2.8%
Cohesion
Fund
Total:
billion
ECU
45.3
69.2
84.1
97.2
Total
payment
as % of
EC GDP
1.10
1.2
1.27
1.27
Regional aid

Investment
competition: - firms
played one area off
another as
governments tried to
influence where these
firms set up
 Government
competition: irrational,
wasteful

Some examples:

Ford-VW joint venture to
make minivans in Setubal
near Lisbon£360 million of
the £1.8 billion paid by EC
and Portuguese
government;
• Overall public share of
cost, 40%

Italy: govt. paid 50% of
American Texas
Instruments’ Avezzano
plant
Case studies of activities
undertaken with EU funding
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Stepping Stones
Women in Agriculture
ESB Links Island Communities
Rural Post Office Development Programme.
VTOS
Sea Research Vessel - Celtic Voyager.
Enterprise Link - Dublin/Belfast Railway
Lough Derg Catchment Protection Scheme.
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
http://www.csfinfo.com/htm/case_studies/index.htm
NDP/CSF Information Office
15 Hatch Street
Dublin 2
Telephone: 01 6396280
LoCall: 1890 230 030
Fax: 01 639 6281
Public Office Open:
Monday - Friday 10.00 am - 12.30 pm
and 2.00 pm - 4.30 pm
Useful documents
 Sixth
Periodic Report on the social and
economic situation and development of
the regions of the European Union

http://www.europa.eu.int/comm/regional_polic
y/dwnld/pdf/radi/en/2_s1_en.pdf
OPINION
of the Committee of the Regions
of 12 April 2000
on the
Sixth Periodic Report on the Social and Economic Situation
and Development of Regions in the European Union
(SEC(1999) 66 final)
1.
2.
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
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
unemployment is on the increase, along with unemployment among
young people looking for their first job.
There has been genuine convergence, and notes that over the last
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
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
76.5% of the average (estimated at 78% for 1999). It states in
particular that trade between those four countries and the Member
States of the Union doubled over the same period.
Future of Regional Policy

The future of regional policy: debate in the
European Parliament


(27 September 2001)
Regional policy was a focal point of the European
Parliament plenary session of 19-20 September.
Mrs Annemie Neyts-Uyttebroeck, on behalf of the
Belgian Presidency of the EU Council, and
Commissioner Michel Barnier seized the
opportunity to present the first reflections in the
debate on the future of cohesion policy and to
outline the coming stages, in terms of both
procedure and substance.
• http://www.inforegio.cec.eu.int/
6th Report
 map
29 of the report gives a remarkable
summary of the reality of the centreperiphery relationship as it stands in
Europe.
 http://www.europa.eu.int/comm/regional_p
olicy/document/doc1_en.htm

List of ERDF programmes in the EU in chronological
order - 1999
Date of Adoption
Title
Type of Intervention
Programs
-
AthensProvision of gas-fuelled bus and a natural gas
stationOP 18/06/99
Belgium URBAN Bruxelles-Capitale (Anderlecht)CIP
20/05/99
INTERREG II C E / F / IRL / P / UK Atlantic Area CIP
27/04/99
Italy "Crisis area of Gela" (Sicile) - Global GrantGG
11/03/99
Spain Territorial Employment Pacts (Obj.1)OP 02/03/99
Italy "BIC Basilicata" - Global GrantGG 11/02/99
Italy "Alimentaria" - Global GrantGG