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SPEECH/ 09/449


European Commissioner responsible for Regional Policy

Speech on EU-Brazil Regional Policy co-operation

Figures and graphics available in PDF and WORD PROCESSED

OPEN DAYS 2009: High-Level Panel: EU-Brazil on Regional Policy co-operation (Worksh op: 07D05)

Brussels, 7 October 2009

Dear Minister, Ladies and Gentlemen,

I am delighted to open this session jointly with Ms Marcia Damo who is personally deeply involved in the dialogue on regional policy between Brazil and the Union. Let me also warmly welcome here renowned experts from Brazil and Europe. This panel marks another step in our co-operation.

In my speech, I would like to address three key issues. I will start by taking stock of our co-operation until now. Then, I will move to the main policy challenge we both face in EU and Brazil, the global economic and financial crisis with outlining the responses. And I will end up with some reflections on the role of territorial cooperation and on our expectations for the future EU-Brazil regional policy cooperation.

Let me start with the EU-Brazil regional policy cooperation.

I am glad to say that the co-operation created within the framework of the memorandum of understanding on regional policy cooperation signed two years ago by Commissioner Hübner and Minister Geddel has been very intense and successful.

Five high-level conferences and congresses allowed us to learn from each other about best practices of regional development in Brazil and the EU. Last year, the participants of the Open Days exchanged views on how our regions should co-operate in order to strengthen innovation and competitiveness.

A milestone in the cooperation in the field of regional policy was definitely the National Exhibition or "I Mostra Nacional" in Brazil early this year which drew much from the idea of the Open Days and provided Brazilian stakeholders of the regional policy with the forum for discussion.

Another big topic of our cooperation was the crucial issue for the implementation of the regional policy, i.e. the capacity building. In the congress in Brasilia and in two training programmes DG Regional Policy has extensively shared their experience in the policy management with our Latin American colleagues. We are going to follow up on this subject in another common training programme in Brazil in November.

To deepen the understanding on the implementation of the regional policy in the European Union and allow Brazilian experts to have a better view on what's going on the ground we have organised together three study visits to Brussels, Luxembourg and some Member States.

Having acknowledged the demand for deepened and structured cooperation, we agreed last year a 3-year cooperation programme for the period 2009 -2011. It foresees a number of actions focused on two main fields.

First, we want to exchange experience, knowledge and best practice, including capacity building in regional policy. The goal is to prepare policy makers and staff at different government levels for the challenge of implementing regional policies.

Second, the Union wants to provide technical support to strengthen strategic capacity, monitoring and evaluation practices in integrated regional plans and programs and to support the implementation of pilot projects in the Brazil-French Guiana border.

I am glad to say these all these events have brought (and I am sure will bring) benefits to both parties, leading to increased mutual understanding and to the consideration of new ways in which our respective policies for regional development might evolve.

L et me now move to the context of our co-operation in the last months –the global economic and financial crisis and the policy responses.

Global challenges

Both Brazil and the EU were not spared the hit of the crisis. Brazil's economy is likely to shrink by 1% this year. In Europe the economic situation is even more serious. The euro area has been in recession since the second quarter of 2008 and GDP is forecast to fall by 4% in 2009.

But the geographic effects of the current global crisis in the EU are highly differentiated. Let's take as an example one macro-region in the EU – the Baltic Sea area. Poland's GDP grew by 1% in the second quarter (year-to-year) while its neighbours' - Lithuanian and Latvian – GDP by 20%. We do not have yet a detailed picture of how the crisis re-draws the map of regional disparities in terms of growth and jobs in the Union. But first signals suggest that although industrial, export-oriented, i.e. relatively more wealthy regions were hit strong, we can witness similarly large-scale, negative effects on employment in less developed regions.

The spatial distribution of the effects of the crisis is, on the one hand, a result of certain past policy choices, first and foremost made at the national, not regional level. On the other hand, it requires a smart policy response. Both horizontal actions and targeted measures must be devised at different levels of intervention – international, European, national and regional.

On a global scale, the crisis inspired G-20 to propose improvements in the functioning of the Bretton Woods institutions and in vital areas of international regulatory framework.

The focus of the European policy response to the crisis evolved together with the crisis from stabilisation of the financial markets to addressing the slump in the real economy by the fiscal stimulus foreseen under the European Economic Recovery Plan which will reach in 2009 and 2010 ca. 3.3% of GDP (or € 400 billion). One of the main strengths of the Plan is the fact that the investments foreseen within its framework aim on the one hand at stimulating demand in the short-term but at the same time help to restructure the European economy and prepare it better to longer-term challenges, like e.g. climate change or energy vulnerability. This plan integrates national responses to the crisis. A number of regions in the EU also worked out their recovery programmes. Not in all cases, however, they were ideally co-ordinated with the national or EU programmes.

While focusing on the recovery we, in the Commission, did not forget about another aim of extreme importance in the crisis: to defend the achievement of the single European market against the protectionist tensions and to assure undistorted competition around Europe.

European regional policy for which I am responsible has also been deployed against the crisis. It has features which make it a decent anti-crisis tool. It is the European Community's largest source of investment in the real economy. The €347 billion which regional policy provides in the years 2007-13 is a stable, secure source of investment financing which contributes to restoring confidence in the real economy and creating jobs.

But the importance of the European regional policy goes beyond being just a provider of public monies.

First, it i s the Community's largest source of investment in projects improving regional competitiveness. It limits the temptation to pump both the EU and the national or regional funds into poorly designed projects.

Second, thanks to the system of multi-level management, it provides the structure to elicit local knowledge about regional comparative advantages and to square it with the common EU goals.

Third, the modifiable operational programmes at regional and national level allow it to react to asymmetric shocks in a flexible way.

The EU further adapted the policy to meet the demands of the crisis. The focal point of changes introduced on the eve of 2009 was to provide additional liquidity to Member States in order to speeding up of projects' implementation or at least keeping the originally foreseen pace in spite of the credit crunch.

I know that in a similar way, Brazil devised the Program for Growth Acceleration (PAC) which aims at boosting investment in energy, logistics and infrastructure . But I would be very interested to hear what the impact of the crisis on Brazilian regions was and how they responded at the policy level.

Territorial Cooperation

Let me now turn to the last part of my speech – the scope of our future co-operation with a particular attention to territorial co-operation.

In our dialogue we are now moving a step forward - we are going beyond co-operation at the level of national authorities and involve regions. We have just initiated a programme exchange for five Brazilian meso-regions within the framework of which they visited last week five European regions to discuss their response to challenges ahead, regional policy's role in addressing them and to establish contacts and initiate region-to-region co-operation.

Although the challenges which Brazil and its regions face are not always the same (e.g. energy security) as the ones ahead of us or we are looking at them from slightly different perspectives (e.g. globalisation), common initiatives and exchange of experience can benefit both sides. Strengthening of networking is a key factor to successful regional development strategies. In many cases, the regions do not know that solutions to their problems have already been developed elsewhere and can be easily adapted. Inter-regional cooperation and knowledge transfer can help find the necessary inspiration and tools to successfully develop and implement own strategic initiatives. One of the examples of such co-operation which will be discussed in the later part of the seminar concerns the alliance of "Four Motors for Europe" – the group of European regions with "Four Motors for Mercosul" – a similar association of Latin American regions. The region-to-region co-operation is a strand of the dialogue I consider very important and would like to see it strengthened.

Let me mention in a few words the most prominent part of territorial co-operation – i.e. cross-border programmes. I note the priority Brazil gives to cross-border cooperation with neighbour countries through the "Programa de Desenvolvimento da Faixa de Fronteira" as well as your support to the implementation and management of regional development plans at meso-regional level.

In this context, European regional policy can also provide you with good examples. It has helped to consolidate in a very concrete way to the operation of the single market through 66 cross-border and trans-national programmes managed jointly across EU internal and external borders as well as supporting the projection of Community values and encouraging the dissemination of best practices across the regions of the enlarged Union in fields such as the environment or equality of opportunity for example.

We should as well exploit fully all possibilities of cross-border cooperation between the EU and Brazil. Yes, we have a common border between French Guiana and Amapa and Para States. The co-operation there is framed under the Amazonia operational programme 2007-2013, which covers also Suriname.

We hope that the projects supported by the Amazonia programme will encourage protection and enhancement of the natural and cultural heritage of the Amazon. They will also enhance cross-border cooperation in the fields of economy, education, training and communication.

We have a few interesting and important projects there: the cooperation between natural reserves situated on both sides of the Oyapock River and the opening of the bridge on this river which will give Guyana first international road connection with Brazil; creation of an Amazonian combined tourist product and an institute of the Amazonian integration with the involvement of universities from three countires; and a feasibility study for a digital connection between Guyana, Amapa and Surinam.

Minister, Ladies and Gentlemen,

Already today a number of European regions directly cooperate with their Brazilian counterparts, as we will see in the two last presentations this afternoon. I would like to express my strong wish to associate Brazilian regions to our current networking activities and to encourage them to actively participate in other global networks of regions promoted by different European regional organisations and international organisations.

In particular, I hope that the regional exchange program just initiated will be continued and enlarged to new regions in the years to come and will be a good example on how the co-operation between regions can boost economic development and how the diversification of urban and rural economies can lead to a higher overall growth.

In 2010, in the context of the efforts in Brazil in drawing up the new generation of regional policy, we want to respond positively to the request to help Brazilian authorities to reinforce its strategic capacity in territorial development.

And of course, we are looking forward to continue the implementation of the agreed cooperation programme and to support Brazilian efforts in preparing its second phase of regional policy.

Thank you very much for your attention.

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