1. EN Regional Policy EUROPEAN COMMISSION Third progress report on cohesion 17 May 2005 Towards a new partnership for growth, jobs and cohesion

2. Regional Policy EUROPEAN COMMISSION EN Third Progress Report on Cohesion EN 2 The report contains 3 parts 1.Analysis of economic and social disparities in the enlarged EU 2.EU cohesion policy and the Lisbon Strategy in 2000-2006 3.The future of cohesion policy and the Growth and Jobs Agenda Structure

3. Regional Policy EUROPEAN COMMISSION EN Third Progress Report on Cohesion EN 3 Disparity levels Disparities in GDP per head between EU-25 still considerable (2003): Latvia – 41% of EU average Ireland – 132% of EU average Luxembourg – 215% of EU average New Member States – below 90% of EU average Part I

4. Regional Policy EUROPEAN COMMISSION EN Third Progress Report on Cohesion EN 4 GDP per head in PPS in 2003 Part I

5. Regional Policy EUROPEAN COMMISSION EN Third Progress Report on Cohesion EN 5 Regional disparities Regional disparities remain high (2002) 189% of the EU-25 average in the 10 most prosperous regions 36% in the 10 least prosperous ones. Over 1/4 of the EU’s population in 64 regions have GDP per head below 75% of EU average. 90% of population in the new Member States living in regions with GDP per head below 75% of EU average 13% of population in EU-15 living in regions with GDP per head below 75% of EU average Part I

6. Regional Policy EUROPEAN COMMISSION EN Third Progress Report on Cohesion EN 6 50 - 75 75 - 90 90 - 100 100 - 125  125 Index, EUR-27 = 100 <50 Regional Disparities in EU27 GDP per head in % in PPP (2002)

7. Regional Policy EUROPEAN COMMISSION EN Third Progress Report on Cohesion EN 7 1.48 – 2.18 2.18 – 2.75 2.75 – 3.62 >= 3.62 no data EUR-27 = 2.25 Regional GDP Growth 1995-2002 Average growth rate in % < 1.48 HU = 1995-2001

8. Regional Policy EUROPEAN COMMISSION EN Third Progress Report on Cohesion EN 8 Employment rates Employment rates – well short of the 70% Lisbon target 62.9% for the EU25 in 2003 Denmark, Sweden, the Netherlands and the UK – only MS with 70% 22 million additional jobs needed to meet 70% target In the new Member States, 7 million additional jobs needed to meet 70% target (increase of ¼) 200 of the 254 EU regions are below the target rate almost 15% of the population lives in regions where the rate is below 55% employment rates remain low among most of the least prosperous regions. Part I

9. Regional Policy EUROPEAN COMMISSION EN Third Progress Report on Cohesion EN 9 Regional Employment Rates 2003 Employed persons between 15 und 65 in % EUR-27 = 62.5 < 55 60 - 65 65 - 70 70 - 75 >= 75 55 - 60 no data

10. Regional Policy EUROPEAN COMMISSION EN Third Progress Report on Cohesion EN 10 Productivity: recent improvements strong productivity growth in recent years but still noticeable differences: –less than 30% of the EU25 average in Poland and the three Baltic states –150% in Luxembourg and Ireland. productivity was below 25% of the EU average in 15 regions but…link between productivity and GDP productivity exceeds the EU average regions with above-average per capital GDP Part I

11. Regional Policy EUROPEAN COMMISSION EN Third Progress Report on Cohesion EN 11 EUR-27 = 1.92 < 0.45 0.8 – 1.16 1.16 – 1.88 >= 1.88 0.45 – 0.8 no data Regional Expenditure in Research and Development 2002 in % of GDP

12. Regional Policy EUROPEAN COMMISSION EN Third Progress Report on Cohesion EN 12 Trends in disparities since the mid-1990s, average EU growth growth has average just over 2% per year regional disparity levels are higher than national disparities but are also falling 10% of EU25 population living in poorest regions (2.2% of total GDP in 2002; 1.5% in 1995) still high levels of internal disparities Part I

13. Regional Policy EUROPEAN COMMISSION EN Third Progress Report on Cohesion EN 13 Index EU 25 = 100 Geographical Eligibility for Structural Funds Support 2007-2013 Draft April 2005, GDP/head  2000-2001-2002 Objective 'Regional Competitiveness and Employment' Phasing-in regions, "naturally" above 75% Convergence objective statistically affected regions Objective 'Regional Competitiveness and Employment' Convergence objective Regions > 75% in EU25) Source: Eurostat

14. Regional Policy EUROPEAN COMMISSION EN Third Progress Report on Cohesion EN 14 Cohesion policy and the Lisbon Agenda Growing orientation of SF programmes towards Lisbon objectives (above 50% in some programmes) –significantly higher in relatively more prosperous regions but lower in the less developed regions Decentralised delivery system key to develop synergies with Lisbon More ownership of the Lisbon strategy through cohesion policy Part II

15. Regional Policy EUROPEAN COMMISSION EN Third Progress Report on Cohesion EN 15 Mid-term review Mid-term evaluations – more emphasis on Lisbon Allocation of the performance reserve. Over €8 billion allocated to successful programmes or priorities Objective 1 – continues to be oriented towards transport and other infrastructure –some Member States with large Objective 1 areas - more emphasis seems to have been placed on research and innovation Objective 2 – more emphasis on economic growth and competitiveness Both Obj. 1 and 2 - education and vocational training continues to be important Part II

16. Regional Policy EUROPEAN COMMISSION EN Third Progress Report on Cohesion EN 16 Spring European Council – March 2005 Explicit endorsement of importance of cohesion policy as an instrument for achieving the Lisbon strategy. Key recommendations: 1.Community resources, including cohesion policy, should be mobilised for 3 dimensions of the strategy – economic, social and environmental. 2.Regional and local actors should take greater ownership of the strategy 3.Greater synergies between Community funds and the EIB in R&D Part III

17. Regional Policy EUROPEAN COMMISSION EN Third Progress Report on Cohesion EN 17 Spring European Council – March 2005 (cont.) Key recommendations (continued): 1.Reduction in the general level of state aid 2.Investment in infrastructure 3.Create more jobs with more active employment policies. 4.Integrated guidelines to be issued at Community-level; MS to establish national reform programmes on growth and jobs Part III

18. Regional Policy EUROPEAN COMMISSION EN Third Progress Report on Cohesion EN 18 Community Strategic Guidelines 2007-2013 Commission proposals for 2007-2013 - more strategic approach targeted on growth and jobs Strategic Guidelines established at Community level by Council decision Basis for National Strategic Reference Framework - to define clear priorities for MS and regions –synergies between cohesion policy and the Lisbon strategy –consistency with the Broad Economic Policy Guidelines and the European Employment Strategy Consistency with other Community policies and priorities would be enhanced Part III

19. Regional Policy EUROPEAN COMMISSION EN Third Progress Report on Cohesion EN 19 Timetable May 2005: Commission proposal on 2007-2013 Strategic Guidelines June 2005: Decision by Council on Financial Perspectives Draft Community Strategic Guidelines adopted by Commission Autumn 2005: - Decision by Council and European Parliament on cohesion policy regulations - Community Strategic Guidelines published - Preparation of National Strategic Reference Frameworks 2006: Preparation of programmes for period 2007-2013 1 Jan 2007: Implementation begins Next stages