Lecture 15: regional policy

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Lecture 15 regional policy

• Introduction Europe and its regions
• regional processes and diversification
• Cohesion and EDRF Funds

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Introduction Europe and its regions

• Regional structure older than nations
• loss of regional structure through process of
  nationalisation and industrialisation in the 19th
  century
• still visible economic, cultural, linguistic,
  political regional differences

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Subnational processes

• Regionalism cultural revival and emancipation of
  European regions after WW II
• Regionalisation decentralisation, devolution and
  European integration (Italy, France, UK)
• Federalisation constitutionalisation of the
  regional level (Spain, Belgium)

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Reasons for modern regionalisation

• State overload by welfare policy
• administrative decentralisation
• regional economic support strategies

Reasons for modern Regionalism

• Anti-nationalist sentiment after WWII
• cultural re-discovery
• Demands for autonomy
• Political Incentives

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Population Density in Europe
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Employment
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GDP per capita
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Reasons for regional economic diversity

• Europe highly centralised in terms of economic
  activity
• Western Germany, BeNeLux, NE France, SE England
• Have 1/7 of land
• 1/3 of population
• ½ of GDP

• underdeveloped rural areas
• dependent on agricultural production
• heavy industry in decline (ship building, coal
  mines, (steal production))

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Mechanisms for supporting backward regions

• Structural Funds
• Cohesion Funds

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• Objective 1 Supporting development in the less
  prosperous regions (GDPlt75 average)
• More than 135 bill. 2000-06
• Objective 2 Revitalising areas facing
  structural difficulties

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• A Member States is eligible for Cohesion Funds,
  which
• has a per capita gross national product (GNP),
  measured in purchasing power parities, of less
  than 90 of the Community average,
• has a programme leading to the fulfilment of the
  conditions of economic convergence as set out in
  Article 104c of the Treaty establishing the
  European Community (avoidance of excessive
  government deficits).
• Ireland no longer eligible (as of Jan 2004)
• 16 bill. 2004-2006

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European integration and regionalism

• Regional/structural policy
• Cross-boarder Cooperation
• Europe of the Regions
• Subsidiarity
• Multi-level governance

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Creation of European Regional Policy
Treaty of Rome preamble anxious to strengthen
the unity of their economies and to ensure their
harmonious development by reducing both the
differences between the various regions and the
backward of the less favored regions.
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Creation of European Regional Policy

• Italian demands on regional policy
• commitment to regional policy in Treaty of Rome
• Paris Summit agreed to set up European Regional
  Development Funds (ERDF)
• Thomson report 1973 regional policy necessary
  for continuous and balanced expansion of EC
  (common market, EMU), resulted in ERDF
• ERDF more a test for regional policy than
  regulation measure

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Political reasons for regional policy

• Tindemans (1975) Report regional policy needed
  to increase peoples awareness
• 1973 Accession (UK incentive)
• Channel for rebate (compensation for uneven CAP
  distribution)
• Attracting the fledging democratic nations in
  Europe (P, E, Gr)
• Cross-border cooperation (water supply, waste,
  transport)

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Economic reasons

• Gap between agricultural and industrial regions
  widening in 1960s
• Followed by industrial demise in heavy industry
  in 1970s (coal, shipbuilding, steel)
• Increased regional policy on national level
• Inter-regional competition increased (outbidding
  for foreign investment)
• A supranational coordination necessary

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1988 Reform of Structural Funds

• after 1975, ERDF criticised as inadequate
• national governments dominated the policy process
  
• enlargement and single market led to major reform
  (1988)
• allocations doubled and partnership principle
  introduced
• stronger roles for Commission and EP
• Multi-level governance, Co-operation between
  regions and Europe

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1993 Reform of Structural Funds

• maintained guiding principles of 1988 reform
• some reassertion of control by governments of
  member states
• Cohesion Fund established to facilitate EMU for
  poor four (Gr, Irl, Sp, P)

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Guidelines for Funding

• Concentration
• Programming
• Additionality
• Partnership

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1999 Reform of the Structural Funds (Agenda 2000)

• context proposed enlargement and completion of
  EMU
• allocations held level, key principles maintained
• New shape of objectives (1,2,3)

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Berlin Council Regional Funds 2000-06

• Objective 1 development of regions lagging
  behind in development
• Objective 2 Regions facing major change in
  industrial, service and fisheries sector, rural
  areas in serious decline and disadvantaged urban
  areas.
• Objective 3 All areas not covered by other
  objectives (education, unemployment)

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Structural Funds - development

• 0.257 billion Euro in 1974
• 2.01 billion Euro by 1984
• 33.4 billion Euro by 1998
• 30.8 billion Euro by 2002
• 195.0 billion Euro 2000-06
• 246.1 billion Euro 2006-2013
• (not incl. Cohesion Fund)

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Cohesion Funds

• 18 Billion Euro between 2000-06
• Funding Allocation 1993-1999
• Greece 16 18 (16-20)
• Ireland 2 6 ( 7-10)
• Portugal 16 18 (16-20)
• Spain 61 63.5 (52-58)

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Cohesion Beneficiaries

• 61 billion 2006-13
• 50 for new members

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Cohesion Funds (lt 90 GDP)

• Expenditure on 2 forms of programme
• 1. Transport programmes
• 2. Environmental programmes
• The Cohesion Fund can contribute between 80-85
  of eligible expenditure

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Assessing funds effectiveness

• National GDPs (EU100)
• Luxembourg 129 Greece 40
• Regional GDPs (EU100)
• Richest part is Hamburg GDP of 196
• Poorest part is Alentejo GDP of 41

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1999 Commission Report

• 1. List of 10 poorest regions has changed little
  between 1986 and 1999
• 2. The richest ten areas have also remained very
  constant
• 3. In the cohesion states growth mostly affected
  urban centres - which are generally richer anyway.

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Economic and Social Committee and Committee of
the Regions

• EcoSoc and CoR consist of representatives of
  economic and social interest representations and
  regional administrations respectively
• Both have consultative functions within the
  legislative process and interact with the other
  institutions.
• Both Committees currently have 317 members
  (between 5 and 24 per Member State, depending on
  the latters size).
• The Nice Treaty introduces an upper ceiling of
  350 members

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Powers to the regions?

• Subsidiarity principle different interpretations
• Regions differ in terms of political power
  (RegLeg)
• National dominance in regional matters
• Italian and Spanish regions had to go to court in
  order to open regional offices in Brussels
• French regions restricted by the constitution
• Federal states need special procedures for
  sub-national interest representation

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Multi-level governance

• A departure from the dualistic and state-centric
  approach to the EU
• Instead, suggesting that the EU is
• increasingly adopting a fragmented, polycentric
  approach to governance
• The sub-national level of government is as
  important as the national and the EU levels in
  implementation of policy
• the existence of overlapping competencies among
  multiple levels of governments and the
  interaction of political actors across these
  levelsStates are not the exclusive links between
  domestic politics and intergovernmental
  bargaining in the EU (Marks et al, 199641)

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The three level model
EU
MS
Reg
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3
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1
EU
MS
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Reg
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4
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Social Policies

• Conventional wisdom Still the domain of the MS
• But
• Health, Safety, work-place regulations,
  anti-discrimination (strikes etc. excluded) ?
  expansion
• Neo-liberal tendencies of the single market
• Social security systems open for EU citizens
• Opening of health pensions markets
• MS neither legally nor de facto in full control
  any more

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Class questions

• How unsuccessful has the EU been in developing
  social and regional policies?
• What are the arguments of the main opponents of
  these policies and where lay the tension lines
  within the Council?
• What were the main reasons for introducing
  regional policies?
• What do you think about this whole regional
  business?