GO 357 The Political Economy of Regionalism Walter Hatch Colby College “A Europe of Regions”

The EU: integrating nation-states

The EU: integrating local governments

In Principle Subsidiarity: decisions should be made at the closest practical level to the citizen

In reality A Democratic Deficit

Regional Policy Treaty of Rome (1957) is designed to promote regional integration … “by reducing the differences existing among the various regions and the backwardness of the less-favored regions.”

Structural Funds European Social Fund (ESF) European Social Fund (ESF) European Agricultural Guidance and Guarantee Fund (EAGGF) European Agricultural Guidance and Guarantee Fund (EAGGF) European Regional Development Fund (ERDF) European Regional Development Fund (ERDF) Financial Instrument for Fisheries Guidance (FIFG) Financial Instrument for Fisheries Guidance (FIFG) Cohesion Fund (not a regional fund) Cohesion Fund (not a regional fund)

Regions in the EU

Why? Maintain cohesion in midst of disparities Maintain cohesion in midst of disparities Germany vs. PortugalGermany vs. Portugal Belgium vs. GreeceBelgium vs. Greece “Sidepayments” “Sidepayments”

New Challenges Dramatic income disparity Dramatic income disparity GDP per capita in Luxembourg: $65,600GDP per capita in Luxembourg: $65,600 GDP per capita in Latvia: $6,800GDP per capita in Latvia: $6,800 Dramatic employment disparity Dramatic employment disparity 2% jobless in Warwickshire (UK)2% jobless in Warwickshire (UK) 30% jobless in Reunion (FR) and 23% in Vychodne (Slovakia)30% jobless in Reunion (FR) and 23% in Vychodne (Slovakia)

Creating a Monster 1/3 of EU budget 1/3 of EU budget ¾ if CAP included¾ if CAP included Annual budget of about 30 billion euros ($37 billion) Annual budget of about 30 billion euros ($37 billion) Seven-year budget of about 235 billion euros ($290 billion) for Seven-year budget of about 235 billion euros ($290 billion) for For : 336 billion euros ($413 billion) For : 336 billion euros ($413 billion)

Structural Funds Current Budget ( ) Billion EUR; commitments in 1999 prices

Old Winners and Losers (pre-enlargement) Net winners: Spain, Portugal, Greece Net winners: Spain, Portugal, Greece Net Losers: UK Net Losers: UK

New Winners and Losers (post-enlargement) Net Winners: Poland, Malta, Latvia, Estonia, etc. Net Winners: Poland, Malta, Latvia, Estonia, etc. Net Losers: Spain, Portugual, Greece Net Losers: Spain, Portugual, Greece

Structural Funds for EU-15 ( ) million euros; commitments in 2004 prices

France

Spain

Poland

Inter-regional integration

Newhouse Wealthy regions Wealthy regions Transnational but not international economic complementaries Transnational but not international economic complementaries Secessionist impulses Secessionist impulses

Catalonia

Jordi Pujol

Padania

Umberto Bossi

Toward a system of multi-level governance