European Union’s Regional Development Policy

Summary of the presentation The concept of regional policy The history of the EU regional development policy Costs/Benefits of the EU regional development policy Euro 2020 strategy Cohesion policy 2014-2020

The need for a EU regional development policy GDP/CAPITA (PPS) in the EU 28 Source: Eurostat

The need for a EU regional development policy Unemployment rate in the EU 28 Source: Eurostat

The need for a EU regional development policy Gross domestic expenditure on R&D (GERD) - % GDP Source: Eurostat

The need for a EU regional development policy Tertiary educational attainment by sex, age group 30-34 The share of the population aged 30-34 years who have successfully completed university Source: Eurostat

The need for a EU regional development policy Hi Lo Ratio GDP per capita (% EU28 average) Luxembourg 251% Bulgaria 33% 7.6* Population Germany 82.5 million Malta 404,000 204 *In US, this difference is only 2.5 and Japan 2

The concept of regional policy An investment policy that aims to reduce economic, social and territorial disparities between European Union member states. An instrument used to promote solidarity with the less developed member states of the European Union.

The history of the EU regional development policy I. The Treaty of Rome - little regional dimension - ”One of the main objectives of the Community was to reduce the disparities in what concerns the level of development between different member states and regions” II. Enlargement in 1973- Its consequences: creation of “ERDF” (European Regional Development Fund) as a specific instrument III. The 1986 Single Act - The “Internal Market” objective and the accompanying policies, concerning economic and social cohesion policies serviced by the “Structural Funds” – four main principles: Concentration Partnership Programming Additionality

The history of the EU regional development policy IV. The 1992 Treaty on the European Union - and the pillars of Community construction concerning economic and social cohesion. Objective: Promotion of balanced and harmonious development of activities in the whole of the Community, of durable growth …etc…of economic and social cohesion and solidarity between the member states. Methods Common Market Economic and Monetary Union Common policies and actions of which, the reinforcement of economic and social cohesion

EU allocates Funds to regions via 6 Objectives Until 1999 Objective 1 (promoting the development of lagging regions) Objective 2 (promoting the economic conversion of the regions seriously affected by industrial decline) Objective 3 (combining long-term unemployment, and promoting equal opportunities) Objective 4 (facilitating the adaptation of workers to industrial changes) Objective 5a (speeding up the adjustment of agricultural/ fishing structures in the framework of the CAP) Objective 5b (promoting the development of rural area) Objective 6 (promoting the development of regions with an extremely low population density)

The history of the EU regional development policy V. The 1999 agreement and the preparation for enlargement. The Summit from Berlin in march 1999 decided the three main objectives regarding the regional development policy: Promoting the structural adjustment of the less developed area – areas where the GDP is less than 75% of the EU average; Supporting economic and social conversion of the areas that are constrained by structural difficulties; Support in what concerns the improving the educational systems.

EU budget 2014 by financial framework headings Source: Eurostat

Regional development policy Main strands of the EU regional development policy Reducing regional disparities Convergence between Member States Promoting good practice in regional development Promoting good governance Supporting/compensating for other EU policies

Instruments used by the EU regional development policy Three main funds ERDF: European Regional Development Fund ESF: European Social Fund Cohesion Fund

Sources of finance of the EU regional development policy European Regional Development Fund - focuses on initiatives relating to economic growth, employment and competitiveness, including investments in infrastructure. The Cohesion Fund – focuses on transport and environnent infrastructure,including renewable energy sources. The European Social Fund – focuses on investments in human capital in the field of education and training.

Community Initiatives Interreg III : cross-border, transnational and interregional co-operation Urban II : sustainable development of cities and declining urban areas Leader + : rural development through local initiatives Equal : combating inequalities and discrimination in access to the labour market

Who benefits? Huge range of potential recipients: Businesses including SMEs Public bodies Associations Voluntary groups All projects considered if meet selection criteria of managing authority of relevant programme Compulsory publication of beneficiary lists

Developing an economy based on knowledge and innovation Euro 2020 strategy Euro 2020 strategy Smart growth Developing an economy based on knowledge and innovation Sustainable growth Promoting a more resourse efficient, greener and more competitive economy Inclusive growth Fostering a high employment delivering economic, social and territorial cohesion

Euro 2020 strategy – Main objectives Employment - 75 % of the population aged 20-64 should be employed Innovation - 3% of the EU's GDP should be invested in Research & Development Climate change - The "20/20/20" climate/energy targets should be met (including an increase to 30% of emissions reduction if the conditions are right) Reduce greenhouse gas emissions by at least 20% Increase the share of renewable energy sources in our final energy consumption to 20% A 20% increase in energy efficiency Education - The share of early school leavers should be under 10% and at least 40% of 30-34 years old should have completed a tertiary or equivalent education Poverty - Reduction of poverty by aiming to lift at least 20 million people out of the risk of poverty or exclusion

Cohesion policy 2014-2020

The main objectives of the 2014-2020 Cohesion policy

Cohesion policy 2014-2020 Level of investment Level of development 182 billions euro for less developed economies – GDP less than 75% of EU average 35 billions euro for transition economies – GDP 75-90 % of EU average 54 billions euro for more developed economies – GDP more than 90 % of EU average

Results of EU Cohesion Policy (figures from 2000-2006 period) 8400 km of rail built or improved 5100 km of road built or improved Access to clean drinking water for 20 million more people Training for 10 million people each year Over 1 million jobs created GDP/capita up 5 % in newer Member States

Results of regional development policy Increasing per capita GDP in Greece, Spain, Ireland and Portugal – ( Greece increased from 74% of the EU average to 88% between 1995 and 2005) Helping to reduce income disparities between richest and poorest by roughly a sixth (between 2000 and 2005) through sustained high growth By 2015, it is estimated that regional policy will have generated an additional 440,000 jobs in Poland, as well as contributing an extra 6% to GDP and 21% to investment Over 44,000 km of road were built or reconstructed in the period 2000-2006. The equivalent figure for rail was nearly 12,000 km Supporting more than 250,000 small businesses in the UK