© Berman Group. Evolution of the Czech Regional Policy in the Context of the EU Regional Policy RNDr. Jan Vozáb, PhD external lecturer, Charles University, Prague consultant, partner Berman Group

© Berman Group. Background for Czech regional policy evolution Character of regional differences –Prague vs. Rest of the country –West-East gradient –Micro-regional vs. mezo-regional differences Structures for Czech regional policy –State interventions vs. local and later regional interventions –Strong sectoral ministries but weak ministry for regional development -> weak formal/official regional policy –Limited (or lack of) co-operation, networking and partnership, both, horizontally and vertically

© Berman Group. Evolution stages of the Czech regional policy and main influences forming it First half of 90s Moderate regional policy Phare instrument and pre-accesion funds Second half of 90s Pre-accession EU accession Creation of regional governments, devolution EU accession – Chapter 21, acquis Two parallel systems New programming Towards integration Economic transition

© Berman Group. Development of the Czech RP until 1996 Moderate regional disparities emerging at microregional/local level mostly Pro-claimed economic liberalism –very narrow official/explicit regional policy –no programming/strategic documents –very limited supporting mechanisms aimed at SMEs support on a project basis Sectoral and fiscal policy instruments much larger than RP, with unintentional and unconceived regional impacts No influence of EU RP: Phare instrument focused on transition issues and mostly institutional building

© Berman Group. Regional policy in the second half of 90s Increasing unemployment (3.5% -> 9%), growing regional disparities both, at NUTS III as well as at local level Moderate regional policy of the new government –first programming documents at national and regional levels –more and stronger delivery agencies –The Act on Regional Development, Government Principles of RP Non-regional policy instruments prevail, partly intentional regional impacts (SMEs support, labour market policy) Modest preparation for EU ESC policy started –separated Phare and CZ policies, Phare project based, very limited support in the field of EU ESC policy –first („training“) operational programmes (e.g. ROPs) – usually no or very modest implementation

© Berman Group. Czech regional policy prior EU accession: High unemployment remains with regional differences, economy grows, regional disparities continue to grow Pre-accession instruments support –direct aim at EU ESC policy adjustment – but still project based –pilot SF like „programmes“ implemented at small scale at local level National preparing for EU ESC policy –programming (two rounds) as well as project preparation –new implementing structures built – parallel to existing ones –twinning – no particular effects –NUTS II level created Former national/regional policies continue unchanged Public administration reform

© Berman Group. Differences between pre-accession instruments and Structural Funds Pre-accession instr. International aid - –Centralised, EC responsibility –Spending technically based Accession oriented =>IB projects important Limited financial resources Many projects not supported Larger projects prefered Support „out-of-system“ Selection of projects similar to public procurements STRUCTURAL FUNDS Support to national policies Decentralised, member state responsibility Spending based on programming ESC oriented => Economic development objectives Larger financial resources Absorption capacity threat Small projects are usual SF co-finances regular national programs „First come first serve“ project selection possible

© Berman Group. Czech regional policy after EU accession : two parallel systems EU ESC policy and programmes parallel to the Czech ones –parallel programmes and other documents –new implementing bodies – eg. Reg. Councils, Secretariats –new dept. of existing ones – eg. CzechInvest, Regional Labour Offices, –parallel delivery mechanisms – based on demand of high number of small local and regional stake-holders –parallel financial flows, too much match funding for end users Former Czech RP and national „programmes“ continue unchanged, sometimes competitive to EU Funds´ programmes New interventions introduced by ESC policy –more development and target oriented (incl. indicators) –new fields (e.g. innovations, life-long learning) –new roles of programme management structures – MAs, IBs, Serious absorption capacity problems

© Berman Group. Comparison of EU ESC policy and Czech national policies interventions Czech policies interventions In-system Top down Bottom-up Supply driven projects Demand driven projects ESC policy interventions Out-of-system

© Berman Group. Czech regional policy in the new programming period Continuous economic growth, decreased unemployment Large EU funds indicative allocation for the Czech Republic ESC policy becomes the core of the Czech RP, aimed particularly at –Innovations, research & development, HR adaptation, Adjustment to EU environmental standards (accession requirements), transportation infrastructue, interventions from regional level (ROPs) Merging national and EU programmes –Former national interventions in the field of ESC policy mostly (not fully) integrated into SF programmes –SF implementation structures partly adapted, many new created due to new programmes -> likely difficulties in co-ordination –Financial flows for SF programmes/projects partly streamlined Big threat of insufficient SF absorption, delays in SF implementation

© Berman Group. CZ regional policy vs. EU regional policy welfare concept pro-active policyre-active policy development concept Czech RP in 90s EU ESC policy Merging CZ RP and EU ESC policy

© Berman Group. Conclusion: New policy paradigm partially accepted but old institutions prevail New interventions – more Lisbon or a development nature, BUT –old delivery mechanisms to continue –wide and non-targeted intervention focus still planned Merging national programmes into SF programmes, BUT –excessive fragmentation continues: 24 OPs, 15 MAs –attempts to „hide“ non-ESC policy interventions into SF OPs –redistribution nature of SF OPs – real implementation at the lowest possible level Financial flows streamlined for SF implementation BUT old legislation and bureaucratic structures –high administrative burden at the level of MAs and IBs –complicated project management for FBs and end users