2. The tasks of cohesion policy To diminish differences in living standard between EU regions To promote sustainable development To increase innovation To increase quality of human capital To improve the qualit of public investment) To promote of partnership in decision making process More equality or more efficiency?

3. Most popular myths on cohesion policy Cohesion policy is not about income re-distribution Re-distribution could be achieved in a more simple and less costly way Cohesion policy = money transferred from rich to poor countries + set of administrative and financial regulations Who should benefit from cohesion policy funds: less developed regions only or all regions? Lower efficiency and exclusion may happen everywhere, also within rich regions Converegency ≠ efficiency and cohesion Growing differences in GDP per capita may result in better use of region’s resources

4. 10 principles of EU regional policy 1. promotion of endogeneous factors of development 2. subsidarity : state policy complementary to the policy of self-government 3. focus on the developmment of ALL regions Sustainable development based on long-term development strategy. 5. co-ordination of policy tools used by different policies (cohesion policy, CAP, trade policy) 6. concentration of resources based on strategy priorities 7. rational use of public money (better quality of public administration) 8. transparency (elimination of coruption) 9. partnership (the role of public consultation) 10. the equal importance of economic, social and ecological factors of development

5. How old is EU cohesion policy? The Roman Treaty (1957): the will of member states to „increase economic and social cohesion: - no specific type of policy mentioned EU regional policy receives apropriate set of tools (structural funds) in 1970s. 1986 – chapter on economic and social cohesion in European Treaty Maastricht Treaty (1992): Cohesion Fund established Lisbon Treaty (2009): EU supports economic, social and territory cohesion and the solidarity among EU Member States

6. How old is the regional policy in Poland? (1) Before 1914: high divergency between Poland’s regions Lack of cohesion in infrastructure Differences in culture and institutional environment: the attitude to legal norms, quality of public administration, parlamentary traditions Ethnic diffrentiation

7. How old is Poland’s regional policy? (2) More active approach of the governmnet after 1914: 1928 tax exemption for less developed regions, Some public investment to diminish discerapncy in regions development: railway Silesia region-Gdynia 1928-1933 Sea port in Gdynia Central Industrial District: lubelski, lwowski and kielecki regions

8. How old is Poland’s regional policy?(3) Central planned economy Results; smaller differences in regions development High impact of political factors on the decision making process Local and regional links destroyed

9. Polish regional policy in 1990s Market economy increases economic and scocial inequlity Reneissance of „regional identity” Administrative reforms (16 regions only) Stronger role of self-government Accession to EU cohesion policy (preparatory stage)

10. Polish regional policy in 2005- 2012) Strong dominance of EU regional policy (positive and negative effects) The change in policy tasks: instead of the polar- diffusive model (2009) model based on generation, territory and innovative solidarity Better quality of strategic documents ( Polska 2030. Wyzwania Rozwojowe, 2009; Polska 2030. Trzecia fala Nowoczesności,2011; Krajowa Strategia Rozwoju Regionalnego 2010-2020, 2010; Strategia Rozwoju Kraju 2020, 2011)

11. How cohesive is the EU? „No Community could maintain itself nor have a meaning for the people which belong to it so long as some have very low standards of living and have cause to doubt the common will to help each Member State to better the conditions of its people” Thomson report 1973 Each enlargement has made regional discrepancies larger

12. EU structural funds European Social Fund European Agriculture Guidance and Guarantee Fund European Regional Development Fund

13. European Social Fund Established in 1957 1960s - focus on uneployment and migration (Italy, Germany) 1990s – concentration on specific groups needs: (youth, women, disabled persons) 1980s – focus on structural changes: from indutrial ecomonies to economies based on services 1990s – globalization and information society {training and projects aimed at elimination of exclusion ) After 2000 - focus on Lisbon Strategy goals ( increase of the rate of acitivity on the labor market, especially among women and people 50+)

14. European Agriculture Guidance and Guarantee Fund Established in 1964, to: - finance structural changes in agriculture and rural development - increase competitiveness of agriculture products, - improve farmers qualifications - create employment outside agriculture (touristc, protection of environment) - finance Common Agriculture Policy Since 2005 EAGGF divided into 2 funds: European Agriculture Guarantees Fund and European Agriculture Fund for Rural Development

15. European Fund of Regional Development Established in 1975 – to diminish differences in EU regions development - support for local development projects in aerias of infrastructure, sport, culture, education, health sector Promotion of information society

16. European Globali z ation Adjustment Fund Established in 2006, is financing measures like: - assistance in search of a new job - careers advice - tailor-made training - mentoring - promoting entrepreneurship (eligible only those who lost their jobs due a reduction of more than 500 people Provides one-off time-limited individual support, such as: job-search allowances, mobility allowances, allowances for life-long tra in inig

17. Cohesion Fund Established in, does not belong to structural funds, implemented at the country level Task: to accelerate EU Member States integration, provide financing to large transport projects and large environment protection projects Eligible countries with GDP per capita < 90% of the average GDP per capita in EU

18. E xpenditure on cohesion policy – EU budget 2010 Structural funds + cohesion fund 1. task „ covergency”61.3% 2.task „competitiveness and emplyment” 15.4% 3.taks „European territory cooperation” 2.5% 4.technical assistance0.2% 5. Cohesion Fund20.6% „convergency task” only20.6% Total (1-5)100.0% Task : „convergency” only81.9%

19. 4 largest net payers to EU budget 2010 country Payment to the budget(% of EU budget) Payment to the country budget (% of EU budget) Germany21.1111.48 France16.4412.18 Italy13.6410.25 UK11.057.73

20. Largest net payers and net receivers 2011 Payments from EU budget (Euo bln) Payments per capita Payments as % of GDP Payments to the budget (Euro bln.)) Payments to the budget per capita payments to the budget as % GDP France13.162202.350.6518.0502770.89 Germany12.133148.410.4619.6712400.75 Italy9.586158.110.6114.3262350.91 UK6.570105.120.3711.2731800.64 Spain 13.599294.651.39.8762130.94 Poland14.441374.74.083.237830.91 Hungary5.330533,05.340.836760.88

21. Social, economic and territorial cohesion Economic cohesion: business friendly institutional environment supports cooperation between regions and in the region, lowers transaction costs, increases the competitiveness level Social cohesion: increases the vertical and horizontal mobility of labor through better education, more career possibilities Territorial cohesion: introduced in the Lisbon Treaty: better access to public services, sustainable development

22. Elements of territorial cohesion Manage concentration (positive and negative impact of cities : higher productivity versus po l lution and social exclusion Better integrate territories: e q ual access to public services of general economic interest, such as: education, health care, financial services, networks Develop new form of cooperation : the EU st ra tegy for the Baltic Sea region, new macro-regional approach Foster urban-rural linkages The future of territorial cohesion: promoting a functional approach to integrated development Ba ckground documents: „ Territorial Agenda of the EU. Towards a more competitive and sustainable Europe of divers regions. 25 May 2007; Sixth Progress Report on Economic and Social Cohesion, How to strengt h en the territ o rial dimension of European Cohesion Policy based on the Territ o rial Agenda 2020

23. Convergence or divergence? 1994-2005, largest winners of cohesion policy: Greece (from 74% GDP/capita to 88%), Spain ( 91% to 102%), Ir e land ( 102% to 145%), Portugal ( 74% i2005 ). Smaller number of regions with GDP per capita< 75% EU average ( 78 to 70, and regions with GDP per capita < 50% EU average (39 to 32).

24. Differences still exist EU enlargement effect Low efficiency of cohesion? 2000-2004 GDP per capita lower in 27 European regions and in 24 regions the rate of GDP growth 0.5% per year ( 5 of those 24 regions between regions with GDP per capita < 75% EU average The increase of in-equality inside the regions, especially urban and rural aeries 116 mln. people UE, (23,2% of total EU population 2008) in the group of people excluded. Bulgaria (45%), Rumania (44%), Poland (31%).

25. Changes in territorial cohesion Lower geographic concentration of economic activity in the aeries between London-Paris- Milano and Hamburg New centers of growth: Dublin, Madrid, Helsinki, Warsaw, Prague, Bratislava, Budapest growth concentration in state capitals – negative impact on the development dynamic (growing diseconomies of scale)

26. V Cohesion Report „Investing in Europe’s Future”) The link to new Lisbon Strategy and the document „Europe 2020” Higher concentration of resources : smaller number of priorities at the project level, part of priorities obligatory at EU level Local pilot projects more important 2020 strategy: „smart, sustainable and inclusive growth Growing role of regulatory reform (Better Government – reduction of administrative burden)

27. The future of cohesion policy Cont i nue in accordance with the solidarity rule or? Diminish funds spend on cohesion policy (the voice of countries being net-payers) A cohesion policy as „the tool for poor regions only”?

28. Effects of cohesion policy in Poland High absorption of funds – better than expect e d Some data on the impact of EU funds on the rate of growth and regions competitiveness. Different models and different results Visible improvement in the quality of public administration, long-run governance in financial sector, quality of regulation – institutional convergence BUT the competitiveness of Polish economy still low „Doing Business” Reports

29. Some results (Poland) The rate of growth(2007) higher by 6-0.9 percentage dependent on the econometric model used The growth rate will be higher after 2007 GDP per capita = 49% EU- 15 average GDP per capita (2003) and 54,6% (2007) Strong regions (Mazowieckie, Śląskie, Wielkopolskie, Dolnośląskie) even more stronger measured by their production share in GDP: The increse from 50.7% od GDP (1999) to 52% (2006)

30. GDP per capita w UE-27=100%, ranking in 265 EU regions (1) region 199920032006199920032006 Poland48,648,952,3xxx dolnośląs kie 50,550,056,0228232230 Kujawsko -pomors. 42,743,845,7236241 lubelskie34,5 35,3252254256 lubuskie43,942,346,5235243240 łódzkie44,045,148,0234239238 małopols kie 42,342,045,4238244242 mazowiec kie 75,076,083,6201195175

31. GDP per capita, EU 27=100%, ranking in265 EU regions (2) region 199920032006199920032006 opolskie40,638,842,1241248247 podkarpa ckie 35,034,635,8251253255 podlaskie35,937,138,4249251252 zachodnio- pomors. 48,546,347,7231236239 pomorskie 49,248,151,5230234235 śląskie51,853,255,5226229231 świętokrzy skie 37,538,239,8246250 warmińsko -mazur. 37.938,639,5245249251 wielkopol skie 50,951,255,1227231239

32. Growing discrepancies (Poland) 2000-2006 5 most rich regions developed faster than regions of Eastern Poland 1999 the „rich group” share in GDP = 118.3%, „poor group” share 73.9% 2006 the same indicator for the „rich” regions = 120.3% for the „poor” regions = 71.4% Differences in GDP per capita Mazowiecki region/ Lubelski region: 1999 =2.17; 20003 = 2.20; 2006 = 2.32 Growing in-equ a lity within regions, see OEC territorial report

33. Poland still divided into sector A and sector B, (Rzeczpospolita, 6 listopada 2012) GDP per capita 2010 (thousands zl) The rate of growth 2010 (%) Dolnośląskie 48.88.8 Kujawsko-Pomorskie 31.14.4 Lubelskie 25.16.2 Lubuskie 31.44.1 Łódzkie 34.26.4 Małopolskie 31.54.3 Opolskie 29.52.7 Mazowieckie 60.37 Podkarpackie 253.6 Podlaskie 274.2 Pomorskie 35.64 Śląskie 39.75.2 Świętokrzyskie 28.23 Warmińsko-Mazurskie 22.35.1 Zachodniopomorskie 32.34.4 Wielkopolskie 38.73.3 Polska 37.15.5

34. share of R&D expenditure in GDP 199920002001200220032004200520062007 Poland 0,690,640,620,56,0,540,560,570,560,57 UE-271,841,851,1,861,871,861,82 1,841,83 The difference -1,15-1,21-1,24-1,31-1,32-1,26-1,25-1,28-1,26

35. Why R&D expenditure so low? R&D expenditure = budget burden. R&D expenditure should be perceived as investment in the future! Sector R&D sho u ld be reformed Low involvement of private sector. The share of private sector in total R%D expenditure 2008 Poland=30.5%, EU=55%, Finland=70.3%, Germany=67.9%, Slovenia=62.6% Diff e rences withi n regions: Mazowieckie -43% of total Poland’s R&D expenditure, Malopolskie- 11%

36. Happiness and GDP per capita 2007 country Happiness index Number of happy years GDP/capita EU-27=100 Ranking in happiness index Ranking in happy years Ranking in GDP/capita Difference happiness- GDP Difference in happy years/GDP Denmark 8.361121,315651 Finland 8.361118,014763 Sweden 8.263122,831413 Ireland 8.062148,1422-20 Luxemburg 8.059150,0471-3-6 Holland 8.062132,24330 Malta7.96076,476181112 Belg ium 7.858115,7810 20 France 7.858108,5891132 UK 7.859116.788800 Cyp rus 7.75593,611121432

37. Happiness and GDP part 2 Spain 7.655105,013 12 Czech Republik 7.55180,1141195-2 Germany 7.555115,814119-5-2 Poland 7.44854,417202585 Lithuania 7.34559,31923 40 Hungary 7.04262,62224220-2 Portugal 6.94575,6352219-6-3 Bu l garia 5.83737,727 00 Rum a nia 7.03741,62226 40