EUROPA - Gateway to the European Union
The European Union may be one of the richest parts of the world, but there are big internal disparities of income and opportunity between its regions. Through its regional policy, the EU transfers resources from affluent to poorer areas. The aim is to modernise backward regions so that they can catch up with the rest of the Union.
Regional policy is an instrument of financial solidarity and a powerful force for cohesion and economic integration. Solidarity seeks to bring tangible benefits to citizens and regions that are least well-off. Cohesion underlines the principle that we all benefit from narrowing the gaps of income and wealth between our regions.
Large differences in prosperity levels exist both between and within EU countries. The most prosperous regions in terms of GDP per capita (the standard measure of wellbeing) are all urban – London, Brussels and Hamburg. The wealthiest country, Luxembourg, is more than seven times richer than Romania and Bulgaria, the poorest and newest EU members.
The dynamic effects of EU membership, coupled with a vigorous and targeted regional policy, can bring results. The case of Ireland is particularly heartening. Its GDP, which was 64% of the EU average when it joined in 1973, is now one of the highest in the Union. One priority of regional policy is to bring living standards in the countries which have joined the EU since 2004 up to the EU average as quickly as possible.
Regional inequalities have various causes. They may result from longstanding handicaps imposed by geographic remoteness or by more recent social and economic change, or a combination of both. The impact of these disadvantages is frequently evident in social deprivation, poor quality schools, higher joblessness and inadequate infrastructures. In the case of some EU states, part of the handicap is a legacy of their former centrally-planned economic systems.
Regional policy is about investing in people.
The EU has used the entry of these countries to reorganise and restructure its regional spending. In the period from 2007 to 2013, regional spending will account for 36% of the EU budget. In cash terms, this represents spending over the seven years of nearly €350 billion. The effort focuses on three objectives: convergence, competitiveness and cooperation, which are grouped together in what is now termed Cohesion Policy.
The priority focus is on the central and east European members plus the regions of the other EU states that have special needs. The 12 countries which have joined since 2004 will receive 51% of total regional spending between 2007 and 2013, although they represent less than one quarter of the total EU population.
The money comes from three difference sources, according to the nature of the assistance and the type of beneficiary.
The bulk of regional spending is reserved for regions with a GDP below 75% of the Union average to help improve their infrastructures and develop their economic and human potential. This concerns 17 of the 27 EU countries. On the other hand, all 27 are eligible for funding to support innovation and research, sustainable development, and job training in their less advanced regions. A small amount goes to cross-border and inter-regional cooperation projects.
The idea is for regional policy to dove-tail with the EU’s so-called Lisbon agenda to promote growth and jobs by
Creating more and better jobs by attracting more people into employment, improving workers’ adaptability and increasing investment in human capital.
