Plenary session 3: The EU Urban Agenda and cities’ role in the creation of growth and jobs GROSEE – Growth Poles in South-East Europe Minas Angelidis - Professor, National Technical University of Athens ESPON Open Seminar 2014 “Opportunities and threats for territorial cohesion: Blue Growth and Urban Poverty”

ESPON GROSEE has examined Athens, Sofia and Bucharest, capitals of Greece, Bulgaria and Romania, the EU countries of South-East of Europe (SEE) and focused on the potential of these capitals to constitute a development axis, which will function as a catalyst to improve the competitiveness of the SEE, in order to obtain a stronger position in the EU space as well as improve its “resilience” in economic crises. ESPON GROSEE and the 3 SEE capitals

1. What are the main territorial trends and observations from your project in relation to the contribution of cities/towns to the creation of growth and jobs, and to avoiding urban poverty and social exclusion? The three SEE capitals constitute a specific case, as they are fully embedded in less resilient to the crisis macro-regions as the “South” EU, in the case of Athens, and the “East” EU for Sofia and Bucharest. In this frame, they presented a low performance as for the technological and innovation readiness which limited their resilience to crises. Specifically, as for the patent applications to the EPO per million of inhabitants for 2008 the differences of “North” metros from the SEE capitals were extremely large, indicatively: Munich: 566, Stockholm: 365, Lyon: 237, Rome: 43, Athens: 11, Bucharest: 8 and Sofia: 6.It seems that during the crisis the performance of “north” metros has improved a bit, while the one of the SEE capitals (as well as of “south” metros) has decreased. 1. Create growth and jobs, avoid urban poverty and social exclusion

Using the terms of this session, these three big cities did not contribute to the creation of growth and jobs, and to avoiding urban poverty and social exclusion., because national and local authorities did not have the opportunity to organise their answer to the crisis as they were submerged by the sudden, very important impact of the crisis on national level. Especially, in the case of Greece, the plan used to face the problem of debt led to a catastrophic impact to the entire country as well as to all cities, both the bigger and the majority of smaller ones. During the crisis, their "weaknesses" have deteriorated, while their "strengths" lose their importance during a period when Community policy options of unilateral budgetary adjustment are applied in the "South" (mostly) and the "East" at the expense of the pre- crisis prevailed policy for cohesion and balanced competitiveness among countries and regions of the EU. 1. Create growth and jobs, avoid urban poverty and social exclusion

The specific feature of the crisis in Greece and specifically in Athens had a really very important, “disintegrating” impact to the labour force; unemployment and unemployment of young people have raised impressively (25% for the first in Figure 1- and 56% for the second); this has led to very high shares of immigration of young people in more developed cities of the EU. Figure 1: Unemployment rate % in EU-27 and the three countries and capitals Create growth and jobs, avoid urban poverty and social exclusion

Also, the impact was impressively high regarding the raise of urban poverty and social exclusion. As a very important number of immigrants live in Athens the tensions to a shrinking labour market are very important.; he zones of urban poverty are very large, inhabited by immigrants together in many cases with Greeks. Regarding competitiveness, the recent decreases in GDP in the three capitals go together with a decrease in investments, both foreign (FDI) and total, as well as a reduction of the added-value and the turnover of enterprises. The sectoral structure of their economy seems to be improved, as the participation of mainly introvert sectors has been limited, such as construction and a range of services, but this is not a "positive impact", since nor investments in extrovert sectors increase or the diffusion of technology and innovation in the economy is radically improved, or the economic sectors of strategic importance are developed. 1. Create growth and jobs, avoid urban poverty and social exclusion

2. According to your project findings, what opportunities and challenges are cities/towns particularly confronted with in their attempts of tackling negative effects of the economic downturn, such as the unemployment of young, highly qualified people? We should stress that, the three capitals have accumulated before the crisis, even fragmentary, driving forces of potential competitiveness at European and international level. Such driving forces are the financial sector developed in Athens as well as tourism and specific branches of services developed in all three capitals, in association with the improvement of transport and communications infrastructure. What is more important: the human potential of the three capitals, constituted a comparative “strength”; the labour productivity was quite high, compared with their overall economic performance, 2. Opportunities and challenges

The share of tertiary educated population and the index of existing human potential for high technology sectors are high in all three cases. Therefore, an important factor for the development of R & D sectors exists. What is missing is a sufficient investment in these sectors. As it is difficult provide such investment from national sources in the current situation, there is a need for FDI in these sectors; national and local authorities try to improve the attractiveness of the three cities for investments through the amelioration of business environment. As GROSEE has concluded, the improvement of the accessibility of the three capitals through appropriate extensions of the TEN-Transport is also necessary. Even more, a substantial EU investment flow –a kind of “plan Marshal” – is evidently necessary. In this case, an intense start – up of the economy of the three cities could also feed investments in public services as well as in the social economy which could highly contribute to face urban poverty and social exclusion. 2. Opportunities and challenges

3. Based on your analysis, to what extent and how can functional and integrated approaches contribute to a positive and sustainable urban development providing better competitiveness, job opportunities and living conditions? Have you, in your project, came across concrete experiences or examples that could be transferred to other cities/towns? The main finding of GROSEE is that the three "Core Cities" presented before the crisis, higher competitiveness dynamic, thereby acting as cores which spread growth and enhance the competitiveness of the rest corresponding Metropolitan Regions, especially the suburban areas included in the respective Functional Metropolitan Areas (FMA). However, Core Cities have also transmitted the disadvantages of their development model to the rest FMA, which have highly slowed down during the crisis. It seems that integration of the SEE capitals in the EU cities network has progressed considerably but remains “dependent” from the metropolises of the EU “north”. In other words, the implementation before the crisis of a Cohesion Policy has not resulted to reach the declared aim of a spatially “balanced competitiveness” in this specific case. In addition: the three capitals do not redistribute enough competitiveness to the rest of the respective countries. 3. Functional integration and sustainable development in times of crisis

Under these conditions, territorial integration at the SEE level through fostering the development axis of Athens - Sofia - Bucharest seems to present the same if not greater advantages compared to the period before the crisis. It can contribute to the improvement of competitiveness of the three capitals - through the strengthening of their extroversion-, which will therefore be less dependent on the EU "North" and therefore less unstable in times of crisis, Finally, there are not concrete examples from the SEE capitals that could be transferred to other cities. However, the “good experience” in urban renewals in the three cities could serve as a good basis to implement a more intense policy of urban regeneration primarily oriented to offer areas for necessary investments in times of crisis. 3. Functional integration and sustainable development in times of crisis