Cohesion Policy The reduction of economic and social disparities between richer and poorer regions. Enlargement increases disparities European Regional Development Fund Integrated Mediterranean Programs Delors: ‘regional disparities can become permanent source of political confrontation.’ Single European Act –cohesion becomes a fundamental objective

Cohesion Policy 1988 reform (Delors 1 package): Double structural funding Economic development Principles of additionality and partnership Concentrated on specific objectives Promotes regionalism in Europe. 1992 Delors II package: increases structural funding Enlargement to Central and Eastern Europe Effectiveness of cohesion policy Ireland versus Greece

Turkey and Cohesion Policy Pre-accession instruments. Development projects in many regions of Turkey.

Source: Zeynep Özler (EU specialist- İktisadi Kalkınma Vakfı), Kriter Türkiye- AB İlişkileri Haber- Yorum Dergisi, December2006, Issue 6, Page 46.

Top 10 Most Developed Areas in the EU Top 10 Least Developed Areas in the EU 1. Inner London (Britain) 315 1. Lubelski (Poland) 32 2. Brussels (Belgium) 235 2. Podkarpackie (Poland) 33 3. Luxembourg (Luxembourg) 213 3. Warminsko - Mazurski (Poland) 34 4. Hamburg (Germany) 188 4. Podlaski (Poland) 35 5. Paris (France) 176 5. Swietokrzyskie (Poland) 36 6. Vienna (Austria) 173 6. Eszak Magyaroszag (Hungary) 37 7. Berkshire, Buckingshire, Oxfordshire (Britain) 162 7. Upolskie (Poland) 8. Autonomous Bolzano state (Spain) 160 8. Eszag-Alföld (Hungary) 38 9. Stockholm (Sweden) 158 9. Vichodne Slovensko (Slovakia) 39 10. Oberbayern (Germany) 10. Latvia TURKEY 11. TR42 (Kocaeli, Bolu, Sakarya, Yalova, Düzce) 53 11. TRB2 (Van, Muş, Bitlis, Hakkari) 10 According to the PPP (EU-25=100) Source: Zeynep Özler (EU specialist- İktisadi Kalkınma Vakfı), Kriter Türkiye- AB İlişkileri Haber- Yorum Dergisi, December2006, Issue 6, Page 47.

Economic Policy Coordination 2000 Lisbon Strategy: To become the most competitive and dynamic knowledge-based economy in the world capable of sustaining economic growth with more and better jobs and greater social cohesion. Broad Economic Policy Guidelines, since 2003 Multilateral surveillance of member state economic performance 2005 Mid-term Review of Lisbon Strategy Not sound performance, Lisbon strategy simplified and relaunched. Emphasis on social and environmental pillars Lisbon Strategy replaced by EU 2020 strategy in June 2010 Guide Europe’s economy our of recession Smart growth, sustainable growth, inclusive growth

The 5 targets for the EU in 2020 1. Employment 75% of the 20-64 year-olds to be employed 2. R&D / innovation 3% of the EU's GDP (public and private combined) to be invested in R&D/innovation 3. Climate change / energy greenhouse gas emissions 20% (or even 30%, if the conditions are right) lower than 1990 20% of energy from renewables 20% increase in energy efficiency 4. Education Reducing school drop-out rates below 10% at least 40% of 30-34–year-olds completing third level education 5. Poverty / social exclusion at least 20 million fewer people in or at risk of poverty and social exclusion

Single Market Continuous process 1992 Program Removing physical barriers Free movement of goods Free movement of people Removing technical barriers Standards, testing, and certification Movement of capital Public procurement Free movement of labor and professions Free movement of financial services Transport New technologies Company law Intellectual property Company taxation

Single Market 1992 Program (cont.) Beyond 1992 Removing fiscal barriers Value-added tax Excise tax International trade Beyond 1992 Transition periods and derogations Liberalization of energy and telecommunications Transposition into national law The proliferation of new trade barriers. Services directive (2005)

Single Market Act 2012 12 Levers to Boost Growth Access to Finance for SMEs Mobility for Citizens Recognizing professional qualifications- European professional card Intellectual Property Rights –a single European patent Consumer empowerment Services Networks: energy and transport infrastructures Digital single market Social entrepreneurship –cooperatives Taxation –energy taxes Social cohesion Business environment Public procurement

Competition Policy Instrument of economic reform in order to boost competitiveness and growth Antitrust regulation Mergers State aid Regulated industries Independence of commission International dimension

Microsoft and EU Competition Policy March 2005, EU orders Microsoft to pay 497 million euros Microsoft pays the fine and appeals the decision in the European Court of First Instance In 2005 and 2006, additional fines for not fully complying with the ruling. In 2007, Microsoft loses the case and announces it will not appeal anymore In 2008, EU fined Microsoft 899 million euros for failure to comply with the decision. Microsoft lodged an appeal.

Financial Crisis and EU Competition Policy State aid to financial institutions Exceptional circumstances: state aid is allowed to correct for a serious disturbance that affects the entire economy of a member state. Tension between short-term financial stability and medium-term competition. State aid to real economy Temporary Framework enabling member states to adopt new support measures until 2010 Opel, Renault

Turkey and Competition Policy Requirement of Customs Union agreement Competition Agency –successful in anti-trust cases Insufficient development in state aids Regional rather than sectoral subsidies