By Prof. Danuta Hübner Brussels, 30 May 2007 GROWING REGIONS, GROWING EUROPE Fourth Report on Economic and Social Cohesion By Prof. Danuta Hübner Brussels, 30 May 2007

Situation and trends: regional disparities In 2004, the top regions (with 10% of the EU population) had a GDP per head that was almost 5 times higher than that in the bottom regions (with 10% of the EU population), while in 2000 it was 6 times higher EUROPEAN COMMISSION Regional Policy

Situation and trends: regional growth Over the period 1995-2004, growth of productivity has been high in the regions of the new Member States. Yet, in 29 regions (notably in France, Italy and Spain) productivity has decreased. EUROPEAN COMMISSION Regional Policy

Situation and trends: employment deficit Around 24 million additional jobs need to be created to reach the Lisbon target of employment rate More than a third of these jobs have to be created in only 30 regions in Poland, Spain, Romania and southern Italy 201 regions out of 268 need to create jobs to reach the Lisbon target of 70% This corresponds to 23.8 million additional jobs Of these, 10.1 million needs to be created in 30 regions alone: 3.5 in the Mezzogiorno 4.5 in Poland 1.5 in Spain 0.5 in Romania EUROPEAN COMMISSION Regional Policy

Situation and trends: the innovation deficit Regions in Scandinavia, Germany, the UK, and the Netherlands emerge as the best performers While in 86 regions home to a third of the EU population, performance is below average EUROPEAN COMMISSION Regional Policy

Challenge 1: demography 85 regions (mainly in the new Member States) are already experiencing absolute population decline, and another 76 regions maintain population growth only thanks to migration EUROPEAN COMMISSION Regional Policy

Challenge 1: demography In large parts of Spain, Italy, and Greece there are only 2 people in employment for every person above retirement age compared to an average for the Union of around 3 people EUROPEAN COMMISSION Regional Policy

Challenge 2: industrial patterns and restructuring 39 regions have more than 3% of their total employment concentrated in the clothing, textile and leather industry (twice the average of the Union), reaching 13% in the Norte region of Portugal EUROPEAN COMMISSION Regional Policy

Challenge 3: climate change 7% of the EU population live in areas at high risk of flooding (red and orange colour) In 45 provinces (NUTS III), over 20% of the population is at risk EUROPEAN COMMISSION Regional Policy

Policy response in the EU Member States Over the past 10 years, there has been an increase in the share of investment under the control of regional and local authorities More the 10 percentage points in Denmark, Spain, Italy, Portugal and Finland Around 9 percentage points in the UK EUROPEAN COMMISSION Regional Policy

Cohesion policy supports much needed investment Between 2000 and 2005 in the four cohesion countries, public investment has been around 25% higher than without cohesion policy Between 2000 and 2006, transfers from the Funds amounted, on average, to an estimated 60% of total public capital expenditure in Portugal 48% in Greece 24% in Spain around 9% in Ireland, Italian Mezzogiorno and German Eastern lander EUROPEAN COMMISSION Regional Policy

Cohesion policy helps shift the policy mix of public investment The share of cohesion spending on R&D, innovation and ICTs has more than doubled between 2000-2006 and 2007-2013 EUROPEAN COMMISSION Regional Policy

Cohesion policy reduces social exclusion and poverty Cohesion policy co-finances the training of 9 million people annually, more than half of them women; Over 450,000 jobs were generated between 2000 and 2005 in six countries, representing 2/3 of Objective 2 funding; Estimates suggest that around 1.4 million additional jobs will be created in Convergence regions between 2007 and 2013 The six countries concerned are France, UK, Netherlands, Spain, Sweden, and Denmark Of the 450,000 jobs mentioned, around 200,000 were created in France, more than 100,000 in the UK, 75,000 in the Netherlands, almost 40,000 in Spain, around 25,000 in Sweden, and the rest (around 5,000) in Denmark The estimates for the Convergence regions are derived from the Hermin modal. This argues that around 2,0 million jobs will be created thanks to cohesion policy between 2000 and 2013. Of these, 1.4 million are created during the 2007-2013 period. These jobs are created essentially (but not only) in the new Member States: almost 400,000 in Poland, 330,000 in the Czech Republic, almost 270,000 in Romania and around 150,000 in both Hungary and Spain. EUROPEAN COMMISSION Regional Policy

Cohesion policy contributes to the growth of GDP Preliminary estimates for the period 2000-2013 (2004-2013 for the new Member States) suggest an increase in GDP compared to a baseline scenario without cohesion policy by: Around 9.0% in the Czech Republic Latvia Around 8.5% in Lithuania, and Estonia Around 7.5% in Romania Around 6.0% in Bulgaria and Slovakia Around 5.5% in Poland Around 3.5% in Greece and 3.1% in Portugal EUROPEAN COMMISSION Regional Policy

Next steps… Questions on the future in the 4th Cohesion Report 27+28 September 2007: 4th Cohesion Forum launches public consultation Spring 2008: Fifth Progress Report on Economic and Social Cohesion, including a report on the public consultation Autumn 2008: Follow-up conference to the 4th Cohesion Forum (tbc) EUROPEAN COMMISSION Regional Policy

More information: http://ec.europa.eu/regional_policy/sources/docoffic/official/reports/cohesion4/index_en.htm EUROPEAN COMMISSION Regional Policy